Cars: Vancl’s Delivery Cuts & A Low-End EV Drive 汽车:凡客诚品配送服务收缩和低端电动汽车推进

I’ll start out my musings this Friday with 2 car-related stories, one that’s seeing online clothing seller Vancl idle part of its delivery service and another that looks at a low-key type of electric vehicle that is making huge inroads in China’s rural markets. Let’s look at the Vancl story first, which has media reporting the company, which has repeatedly delayed a planned New York IPO, has closed or consolidated a number of locations for its fully-owned Rufengda delivery unit. (Chinese article) Vancl itself appears to confirm the report by calling the move an “adjustment” rather than a cost-saving measure, and is stressing the move is unrelated to the health of its broader business. Followers of Vancl will recall the company made another “adjustment” last year when it reportedly laid off about 5 percent of its workforce. (previous post) Vancl also recently lost its CFO, something that often happens when a company is facing financial difficulties. Or course, these kinds of rumors are inevitable for such a high-profile company like Vancl, as the entire e-commerce sector faces a cash crunch due to rampant competition that is already forcing limited sector consolidation. Look for more such “adjustments” from Vancl, which is likely to forge ahead with its IPO if and when market sentiment ever improves, which is unlikely before the late third or even fourth quarter. Meantime, my old employer Reuters is reporting on an interesting kind of super low-end electric vehicle that is quietly gobbling up market share even as Beijing’s plans sputter to promote larger traditional EVs. (English article) These super low-end cars appear to be gaining popularity in the countryside mostly, where farmers are buying them for around $5,000 apiece. They seem to be filling a niche somewhere in between a tractor and a real car, with limited speeds of only up to 50 kilometers per hour and running on environmentally unfriendly lead-based batteries. But they’re fast approaching the 100,000 mark for annual sales, with a company called Shifeng as the industry leader, compared to only 8,000 true EVs sold last year despite generous incentives from Beijing. This space could be one to watch, as Shifeng claims that representatives from the likes of Toyota (Tokyo: 7203) and Mitsubishi have come to check out its operations in search of similar alternatives to more costly traditional EVs. Stay tuned for some potentially interesting initiatives to come out of the segment, where China for once has the potential to become a true innovator if this space doesn’t get squashed by Beijing.

Bottom line: Vancl’s scale back of its delivery service is its latest adjustment as it tries to save money, with more moves likely before it makes its delayed IPO later this year.

Related postings 相关文章:

China IPO Train Hits Bump With Vancl Resignation 中国上市事件撞上凡客诚品CFO辞职

China Internet Bubble Sees Vancl Dressing Down 中国互联网泡沫见证凡客裁员

Foreign Automakers Uncharged on China EVs 外国汽车商对中国电动汽车市场态度谨慎

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