Neta Auto Faces Challenging 2024: Salary Cuts, Sales Slump & Production Delays

Neta Auto (Neta), a brand under China’s Hozon Auto, once boasted strong sales, outselling companies like Li Auto, Nio, and Xpeng in 2022. However, it appears that they now facing challenging times.

According to a report on CarNewsChina, Neta's strong sales momentum fell short as the brand aimed to move upmarket with more advanced and premium models. Neta’s current lineup includes the Neta Aya (Neta V), Neta X, Neta GT, Neta L, Neta S, and Neta S Hunting. In Malaysia so far only the Neta V and X are available.

Neta further reported that this year, its domestic sales fell significantly, with only 53,853 units sold from Jan to Sept - less than 30% of its annual target. Oct sales dropped by 40% from Sept, with around 4,500 units delivered. Compounding this is the delay in delivery of the Neta S Hunting model due to a missing accessory.

Due to these setbacks, Neta's main factory in Tongxiang, Zhejiang, paused production for half of Oct. This plant, which primarily produces the promising Neta L crossover featuring CATL's new sodium-containing Freevoy battery, has a capacity of 200,000 units annually.

Alongside production issues, Neta reportedly also cut employee salaries in 2024, with some high-ranking employees facing cuts up to 30%. Some workers also reported delayed salary payments due to supplier debts.

To counter this Neta did however announce a staff equity incentive plan, offering 5% of company shares as incentives. Hozon Auto has also reported growing annual losses, totaling nearly USD 1 Billion (MYR 1 Billion) in 2023.

Despite declining sales in China, Neta is focusing on international markets as a potential lifeline. The brand has expanded into Central Asia, South East Asia, Latin America, and South Africa. It also has a production facility in Thailand, which began operating in late 2023. However, its plans to enter the larger European market may be affected by new EU tariffs on Chinese EVs.

In Malaysia, Neta has entered into a partnership with NexV to locally assemble (CKD) the Neta V, and a roll-out for which is expected in 2025.