Chinese-backed U.S. auto startup hires Italdesign Giugiaro
Hybrid Kinetic Motors Corp., a Pasadena, California, venture spearheaded by the former CEO of China's Brilliance China Automotive, and the Italian engineering and design company were today holding a public contract-signing.
Italdesign said it will design eight vehicles for the venture, which plans to build 300,000 models annually in a new factory in Alabama.
Italdesign Chairman Giorgetto Giugiaro said the $500 million contract with HK Motors is by “far the biggest” order won by the design house in its 42-year history.
HK Motors announced last September plans for a green-vehicle manufacturing plant in Baldwin County, slated to open in 2013.
Giugiaro said his company will design vehicles for HK Motors that will include sedans, crossovers, SUVs, minivans and light commercial vehicles.
HK Motors chose Italdesign because founder and chairman Benjamin Yeung has already cooperated with the Italian consulting company when he was head of BMW AG's China partner Brilliance.
During 10 years as chairman and CEO of Brilliance Automotive Holdings from 1992 to 2002, Yeung subcontracted Italdesign to design and the engineer the Zhonghua sedan, which was the first modern car built by a domestic Chinese automaker when it was introduced in 2001.
Yeung previously hired Italdesign to create a sedan in China.
Last year, a European engineering company started work on a hybrid powertrain for HK Motors, which is said to be based on a 1.5-liter turbocharged engine that runs on gasoline or compressed natural gas.
The company has not been named but recent press reports in Alabama suggest that FEV Motorentechnick GmbH of Aachen, Germany, is working on the powertrain.
FEV did not reply to a request for comment.
Unorthodox auto venture
HK Motors's plans are still quite sketchy in terms of the size and financing of its planned multi-billion dollar investment for the factory.
The unorthodox auto venture involves giving U.S. citizenship to Chinese nationals in exchange for million-dollar investments to back the company's plans to build and distribute cars in the United States under a new marquee.
According to the company's Web site, the project proposes to invest up to $4.5 billion in an automaker that will build 3 million vehicles a year once the company is fully established in 2018.
The initial Alabama plant is to begin production in 2013. Its ambitious plans call for 6,000 employees to make 300,000 vehicles a year. That would give Hybrid Kinetic, which has no brand name yet and no dealers, one of the largest auto plants in the United States. Other plants could be added later, in both North America and China.
The out-sized proposals have met with some skepticism and confusion.
Chinese media have carried government comments that appeared to cast aspersions on Yeung's credentials as an automotive executive. Yeung, formerly known as Yang Rong, fled from China with his family for unknown reasons in 2002 and settled in Los Angeles.
Last year, some of Yeung's associates in the venture broke away and began pursuing a rival project with Mississippi authorities, which resulted in a lawsuit by Yeung.
But according to Robert Ingram, president of Baldwin County, Alabama's Economic Development Alliance, Yeung's project continues to move forward.
They are doing all the right things,” Ingram says. “We are doing our due diligence. But they are spending their own money to do all the necessary preliminary things.”
At HK Motors' request, the county has obtained options for an auto plant site in Bay Minette, Ingram says.
The venture is currently negotiating a formal project agreement with the state of Alabama that would involve the same sort of public incentives that Alabama has provided over the past 15 years for plant projects by Hyundai Motor Corp., Mercedes-Benz and Honda Motor Co.
Ingram says the county could exercise its options for the auto plant site in the next six months.
“It's looking more and more like we could have a groundbreaking this year,” Ingram says. “At some point, we expect to make a contribution to the project, just as we did for Hyundai and Honda and the others.”
You can reach Luca Ciferri at email@example.com.