The last laugh, it seems, is on HAAH.
The California-based holding company said this week it will file for bankruptcy after scuttling plans to import Chinese cars.
In April HAAH Automotive Holdings signed a letter of intent, or LOI, with China’s SICAR Automotive Technology Development Co. That deal would have brought SICAR’s Vantas and T-GO brands to the U.S. market.
Industry veteran Duke Hale, who served as the founder and CEO of HAAH, isn’t ready to hang up his hat, however. He told Automotive News that he now is making a bid to pull another struggling automaker, Korea’s SsangYong, out of bankruptcy.
“If we were successful in our acquisition of SsangYong globally, that obviously means we would have the [right to] the U.S. and Canada markets,” Hale told the trade publication. He has formed a new company, Cardinal One Motors, to make a bit for SsangYong. It’s registered in Delaware.
Coming to America tougher than it seems
The collapse of HAAH is the latest setback for China and its increasingly ambitious domestic automakers, a number of whom have been promising to jump into the American market for more than a decade. So far, the only Chinese cars sold in the States are built and imported by Volvo and Buick.
In 2019, Hale and an assortment of other American auto industry veterans put together a deal with China’s Zotye– pronounced ZOH’-tee. HAAH expected to begin importing the T600, a Toyota RAV4-sized SUV, in 2020 or early 2021.
A key selling point was going to be a low price tag, Hale told TheDetroitBureau.com in May 2019. “Think in terms of 20% less than the targeted competition,” he said then.
But the plan was scuttled due to a variety of setbacks, the pandemic among them. When it fell apart, HAAH approached other potential Chinese partners, including Chery Automobile. Then it turned to SICAR, the automaker focused on battery-electric vehicles, rather than the gas models that Zotye would have provided.
“There is no question that electric vehicles are the future in North America, and we’re excited to let everyone know of our plans,” Hale said in a statement released on April 20.
The collapse of that deal appears to have triggered HAAH’s bankruptcy. But Hale has just moved on to his next idea.
Plan C for Hale
SsanYong has long been the weak player in the Korean market, bouncing around between owners and investors and, in recent times running up worsening deficits. Its 2020 operating loss widened to 449 billion won, or $401.76 million, from 282 billion won a year earlier, according to Reuters. Meanwhile, revenues fell 19% to 3 trillion won.
SsanYong’s major investor, India’s Mahindra and Mahindra, last year signaled plans to dump its majority stake. Since then, officials at Korea’s fourth-largest carmaker have been looking for a buyer but when none appeared the company was put into receivership. That matter, handled by the Seoul Bankruptcy Court, has now been put on hold, Korean news media report.
While local news reports have focused on a HAAH rescue, Hale said his old company is not part of the plan. Any bid for SsanYong will be made by Cardinal One.
Meanwhile, it is unclear whether Hale and Cardinal One actually have the resources to pull an acquisition off. He told Automotive News it would likely require raising $250 million to $350 million.“We did a lot of due diligence on this deal,” he said, adding, “It’s going to take a significant amount of money and a significant amount of effort” to complete.