Senmiao Technology signs strategic agreement with Hongyu Auto to increase access to EVs

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Collaboration with Sichuan Hongyu Enterprise forges three-year roadmap for cooperation on procurement of electric vehicles and cross promotion of brands, products and services to accelerate expansion of Senmiao’s Auto Transaction and Related Services

Senmiao Technology Limited, a provider of automobile transaction and related services targeting the online ride-hailing industry in China, announced that it has signed a strategic cooperation agreement with Sichuan Hongyu Enterprise Management Co., Ltd. (“Hongyu Auto”) to facilitate the purchase of electric vehicles (“EVs”) and cross-promote their brands, products and services for a term of three years, with a goal to further expand its automobile transaction and related services business (“Auto Business”).  Based in Chengdu, Hongyu Auto is one of the largest auto dealer groups in southwest China.

Under the cooperation agreement, Hongyu Auto will promote Senmiao’s Auto Business to EV manufacturers. Senmiao in turn plans to utilize the auto financing affiliates of the EV manufacturers with the goal of facilitating Senmiao’s purchase of over 2,000 EVs at favorable costs for ride-hailing drivers and for other commercial use over a three-year period. Senmiao’s EV procurement process will also be partially funded by the recently announced RMB50 million (approximately US$7.0 million) capital contribution from Hongyi Industrial Group Co., Ltd. (“Hongyi”) expected to be received by Senmiao’s variable interest entity engaged in its Auto Business.  While the strategic cooperation agreement does not mandate actual automobile purchases or other financial commitments between the parties, it solidifies an important three-year collaboration for Senmiao and Hongyu Auto on numerous sales channels, including automobile finance and insurance services, automotive spare parts procurement and supply chain, automobile after-sales maintenance and rescue services. Senmiao also intends to open additional retail stores or maintain its brand presence at Hongyu Auto’s dealerships to provide transaction facilitation services to ride-hailing drivers in Chengdu, while cross-promoting products, brands and services with Hongyu Auto.  

Mr. Xi Wen, Chief Executive Officer of Senmiao, commented that, the agreement solidified an important collaboration for Senmiao as they worked towards achieving long-term sustainable growth in their Auto Business. This cooperation was expected to reduce Senmiao’s procurement and operation costs and improve the services they provided to short lease ride-hailing drivers. The company believes this agreement will put them in an even stronger position to manage the adverse impact of COVID-19, as they focused on accelerating the expansion of their Auto Business and cross-promoting their products and services to a wider audiences across southwest China. Finally, they believe that the cooperation with Hongyu Auto would enable them to give their ride-hailing drivers more cost-effective access to electric vehicles which would align with their social responsibility to lower overall carbon footprint.  They are excited about this next step and look forward to finding more innovative ways to drive long-term sustainable growth for their shareholders.

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