The second “Asian OEM manufacturer” interested in NEVS is rumored to be Chinese automobile conglomerate Dongfeng.
Dongfeng made a significant move today with their announcement to start a new joint venture with a Swedish vehicle manufacturer.
Flying under the radar for most, Dongfeng actually made a first move on Swedish soil already in 2012 when they took a 70% stake in T-Engineering, a Trollhättan-based company that was started as a spinoff from SAAB Powertrain AB. During the course of last year, Dongfeng bought the remaining 30% giving the 50 employees not only physical proximity but also functional value add to NEVS.
Today's announcement concerns the start of Dongfeng Commercial Vehicles (DFCV), a new daugther company in which Volvo Trucks is taking a 45% share. Discussions about this joint venture had been going on since 2012 and provides Volvo Trucks improved access to the Chinese market while Dongfeng will benefit from collaboration in the field of R&D.
All the above mentioned themes sound pretty familiar when thinking about NEVS 'reorganization plans. For both NEVS and Dongfeng, "Plan A" and "Plan B" make sense.
Having said that, all of the (media) attention has recently been focused on Mahindra in conjunction with the extension of the reorganization process last month, and Dongfeng hasn't really been mentioned anywhere.
Does this mean they are out of the picture as co-investor in NEVS? Hard to say. Having more than one investors is by definition adding an additional level of complexity to an already really challenging reorganization. On the other hand, getting access to the world's largest economy (China) should be worth quite a bit and securing sufficient investment $$ is obviously critical for long-term success.
The clock keeps ticking
During the discussions around the application for extension of the reorganization last month, NEVS stated that an approval from the Board of the “Asian OEM” was expected by the end of December. There hasn't been any news around this and there also was radio silence around any settlements with the creditors. With the Christmas holiday season behind us now, decisions need to be made (and announced) sooner rather than later as the clock keeps ticking…