Bricklin: Visionary taking equity stake in Chery; secures $225 million infunding

[nadepalma]

Source: http://www.autonews.com/apps/pbcs.dl.../1117&refsect=

Bricklin expects to receive $225 million



Gail Kachadourian
Automotive News / February 10, 2006 - 2:08 pm

Visionary Vehicles LLC founder Malcolm Bricklin said Friday that he has secured an investment of $225 million from Atlantic Pacific Capital Inc., a Greenwich, Conn., investment banking firm.

Visionary plans to import vehicles from China's Chery Automobile Co. to the United States starting in late 2007 or early 2008.

Bricklin says the money will be used to fund product development at Chery via a joint venture between the two companies. Chery requested the $200 million to prepare products for the United States. As part of the deal, Visionary will acquire an equity stake in Chery operations in Wuhu, China.

Atlantic Pacific declined to comment on the record about the deal.

You may e-mail Gail Kachadourian at gkachadourian@crain.com

[nadepalma]

Originally Posted by AutoNews.com

As part of the deal, Visionary will acquire an equity stake in Chery operations in Wuhu, China.

This is a very, very interesting piece of information. I now that Bricklin is really serious about this venture -- and he just might have soemthing on his hands here (though being very pro-Big 3, I hope he doesn't succeed much) -- but actually getting a stake in Chery is pretty impressive. First and foremost, the fact that he'd actually get a Chinese company to sell him a stake (with the government's approval no doubt since they have a planned economy) is pretty impressive. But IF the Chinese honor it and actually allow him to have a say would be even more interesting.

I wonder if this could lead to a larger stake later on down the line with Bricklin even being a major shareholder?

We are living in intersting times for the auto industry -- no doubts there.

[DropShadow]

It is hard view this deal at face value. One has to believe there is something very lucrative in it for the Chinese to sell a stake (much less to a Westerner), or so they believe. Technology transfer (what little there is right now, granted) , input on design/manufacturing/marketing...your guess is as good as mine. But quite possibly there is something they want down the line that they view as more valuable than a share in a (currently) smalltime operation. I hate to sound cynical, but having been witness to a few foreign joint-ventures myself, you become cynical.

[saturnsteve]

You know that is not a bad looking car, now lets just hope they are not up to par with American cars, or we are in trouble!

[Geotpf]

nadepalma, this is a sign that this is serious. I think Bricklin was always serious in his own mind, but the fact that he convinced somebody else to give him $225 million (which it looks like he turned around and gave to Chery) means that somebody believed him and the venture can move forward. It appears what happened was that Chery didn't have the money to develop cars to American standards, so they asked Bricklin to give him some, and, of course, in return for the investment, they had to give him a stake in the company. The Chinese government, amazingly enough, is probably only minimally involved in this-Chery is privately owned, unlike most of the automakers foreign companies have joint ventures with to make cars for domestic consumption. This looks like it will proceed. Geely (which is also privately owned) is taking a more conservative approach which will also proceed. So, in two or three years, expect both of them in the market place in the US, at least getting thier feet wet if not full fledged conpetition here yet.

[Quickening]

Its a knock off Eclipse, just more edgy.

[56 Starchief]

WOOHOO to Wuhu!

that thing looks better than the eclipse LOL

[FoMoCo Fan]

Originally Posted by Quickening

Its a knock off Eclipse, just more edgy.

Or a G6 Vert knock off!

[cfch3399]

Or a Peugeot knock off. Copying designs works for Toyota, it should also work for a company that even has a knock off name.

Originally Posted by FoMoCo Fan

Or a G6 Vert knock off!

[Cortazzo]

These Chinese cars are still very low quality. I think they are selling an suv in europe and it got the worst crash test rating of any car in history. There was an article about it a few months back. They will have to pull some tricks to get folks to trust a chinese car, even 10k is a substantial investment for most people.

[New_Mexico_Sunset_on_Rt66]

That's a nice looking product. I dunno. The new Tundra and Chery scare me. The Koreans made a big splash in the 1990's, and now the Chinese?

There are just too many d@mn choices for people to settle on a Buick or Pontiac. Patriotism does not seem to matter.

CNN.Money.com just announced that the trade deficit just reached a new high. We are consuming more than we produce. I country that continues on this path cannot survive.

[asim]

Originally Posted by Quickening

Its a knock off Eclipse, just more edgy.

It looks better than the Eclipse...

[kenman923]

It is a nice looking car, but I wonder what the quality will be like.

[redimpss5]

Originally Posted by 56 Starchief

WOOHOO to Wuhu!

that thing looks better than the eclipse LOL

Thats a good one!!!

[nadepalma]

Originally Posted by Geotpf

nadepalma, this is a sign that this is serious. I think Bricklin was always serious in his own mind, but the fact that he convinced somebody else to give him $225 million (which it looks like he turned around and gave to Chery) means that somebody believed him and the venture can move forward. It appears what happened was that Chery didn't have the money to develop cars to American standards, so they asked Bricklin to give him some, and, of course, in return for the investment, they had to give him a stake in the company. The Chinese government, amazingly enough, is probably only minimally involved in this-Chery is privately owned, unlike most of the automakers foreign companies have joint ventures with to make cars for domestic consumption. This looks like it will proceed. Geely (which is also privately owned) is taking a more conservative approach which will also proceed. So, in two or three years, expect both of them in the market place in the US, at least getting thier feet wet if not full fledged conpetition here yet.

I think you are right about the standards that Americans are expecting, but I also think that the Chinese (or those willing to spend money) have gone through great lengths to seek out Western help in getting their products up to snuff. Look at their cooperation with Bertone, Bosch, AVL (their engine deisgner), etc.

So Chery is "privately-owned"? I didn't think that existed in China. I thought the local government over there (their region or state) ran the show.

I'm just wondering if down the road a piece, let's say Bricklin makes so much money he takes a substantial stake in Chery -- will the government allow him to do that? Would they block it? Or what's to say that a group of investors, headed by Chery, decide to take a controlling stake and have a "virtual American" car company based in China but exporting cars around the world using OEMs like Bertone, etc. to do most of their engineering -- would they even allow such a maneuver? Would the Chinese just take them over once they've made their investments and become successful enough?

These are just thoughts swirling in my head, but they speak to a larger empahsis on capitalism, copyright/patent laws, investing and the rule of law -- things that the Chinese haven't really been the best with in the past.

Just my thoughts.