The Impact of Jiyue Auto’s Collapse on the Chinese Automotive Market
The recent collapse of Jiyue Auto has sent shockwaves through the Chinese automotive industry, marking the second high-profile company to go bust in 2024 after HiPhi and its parent company, Human Horizons. The fallout from these collapses raises concerns about the long-term impact on buyers and the resale value of their cars.
One car blogger, Han Lu, shared his experience of buying a Jiyue 07 for 230,000 yuan last month, only to receive an offer of 20,000 yuan when attempting to sell it to second-hand car dealers. This drastic drop in value highlights the uncertainty surrounding Jiyue Auto and its impact on owners.
With reports indicating that 70% of Jiyue’s parts come from Geely, maintaining these cars in the future may not be a significant issue. However, the financial losses incurred by owners of cars from failed companies such as Jiyue and HiPhi paint a grim picture for the resale value of their vehicles.
These significant losses could deter potential buyers from considering cars from new entrant brands like Neta, which is already facing challenges in the market. The uncertainties surrounding the long-term viability of startups like Nio and Xpeng further add to the apprehensions among consumers.
The collapse of a brand backed by heavyweights like Geely and Baidu raises questions about the stability of the Chinese car market. The ongoing price war and pressure on suppliers to reduce prices create additional strain on the industry, potentially leading to a cascading effect if any OEM collapses owing money to a supplier.
As the market braces for potential realignment in 2025, the collapse of Jiyue Auto serves as a stark reminder of the challenges faced by new entrants in the competitive Chinese automotive industry.
Sources: Fast Technology, Car News China
