Chijet Motor Company, Inc.’s Subsidiary Entered Into Framework Cooperation Agreement with Uzbekistan Customer
Chijet Motor's subsidiary, FAW Jilin Automobile, announced a framework cooperation agreement with Uzbekistan's TANK AUTO on May 29, 2024. This three-year agreement will see TANK AUTO act as a distribution and sales agent for FAW in Uzbekistan.
The economic governor of Tashkent, Sayyed Karimov, visited FAW's production plant and expressed confidence in achieving a sales volume of 12,000 units within three years. Both parties emphasized the compatibility of FAW’s vehicles with Uzbekistan’s market demands.
Chijet Motor specializes in traditional fuel vehicles and new energy vehicles (NEVs), with advanced manufacturing systems and a stable supply chain. It operates major production facilities in Jilin and Yantai, China.
- Framework cooperation agreement with Uzbekistan's TANK AUTO for three years.
- Potential sales volume of 12,000 units within three years.
- Expansion into Uzbekistan market, a developing country.
- Support from Tashkent's economic governor, Sayyed Karimov.
- Confidence in FAW's vehicle models meeting Uzbekistan's market demands.
- Chijet's advanced manufacturing systems and stable supply chain management.
- Development of NEV production facility in Yantai, China.
- No immediate financial figures or revenue projections from the agreement.
- Potential risks and costs associated with entering a new market.
- Dependence on achieving the projected 12,000-unit sales within three years.
- No specific details on how the agreement will impact overall profitability.
The cooperation agreement between Chijet Motor Company's subsidiary FAW Jilin Automobile Co., Ltd. and TANK AUTO in Uzbekistan represents a strategic expansion into a new market. This agreement positions Chijet to capitalize on the growing demand for vehicles in developing regions. Uzbekistan, with its expanding middle class and increasing automotive consumption, offers a promising opportunity for sales growth.
Signing a deal to sell 12,000 units over three years indicates a significant boost in revenue potential. However, it's important to note the challenges associated with entering a new market, such as adapting to local consumer preferences, regulatory environments and potential logistical hurdles. The commitment by the Uzbekistan partners to achieve the sales target is optimistic, but investors should monitor quarterly sales figures closely to gauge the success of this venture.
Chijet's ability to provide vehicles that align with the preferences and price points of the Uzbekistan market will be a key factor. Any disruptions in the supply chain or production could impact the company's ability to meet its targets.
From a financial perspective, the agreement has the potential to enhance Chijet Motors' revenue streams and diversify its market presence. Expanding into Uzbekistan could lead to increased sales, which would positively impact the company's top-line growth. It's important to consider the gross margins on the units sold, as well as any costs associated with establishing and maintaining the distribution network and after-sales services in Uzbekistan.
Investors should pay attention to the financial terms of the agreement, such as pricing, cost-sharing arrangements and payment terms. Any favorable terms could boost profitability. However, the risk of currency fluctuations and economic instability in Uzbekistan should also be factored into the financial outlook. Monitoring the financial health and performance of TANK AUTO as a local partner is essential to ensure the sustainability of this agreement.
Long-term success will depend on continued demand in Uzbekistan, effective cost control and the ability to scale operations without significant capital expenditures that could strain the company's financial resources.
The automotive market in Uzbekistan represents an intriguing opportunity for Chijet Motor Company. The framework agreement with TANK AUTO provides a foothold in a market that is likely to benefit from increasing economic development and consumer purchasing power. However, it will be critical for Chijet to adapt its vehicle models to meet local needs and preferences, taking into account factors such as driving conditions, fuel availability and maintenance infrastructure.
The successful implementation of after-sales services will be vital in building brand loyalty and ensuring customer satisfaction in Uzbekistan. This includes establishing reliable service centers, ensuring the availability of spare parts and providing training to local technicians.
Given that Chijet is involved in both traditional fuel vehicles and new energy vehicles (NEVs), there may be opportunities to introduce environmentally friendly models in the future. However, the current focus appears to be on meeting immediate market needs with practical and affordable vehicles.
JILIN CITY, China, June 14, 2024 (GLOBE NEWSWIRE) -- Chijet Motor Company, Inc. (Nasdaq: CJET) (the “Company” or “Chijet”), a high-tech enterprise engaged in the development, manufacture, sales, and service of traditional fuel vehicles and new energy vehicles (“NEV”) in China announced that on May 29, Chijet’s majority-owned subsidiary FAW Jilin Automobile Co., Ltd. (“FAW”) entered into a framework cooperation agreement with Sayyed Karimov, the economic governor of Tashkent Region of Uzbekistan, on behalf of TANK AUTO, a Uzbekistan local auto distributor. TANK AUTO will carry out automotive sales and after-sales services, as a distribution and sales agent of FAW in Uzbekistan in the next three years.
An Uzbekistan economic and trade team led by Sayyed Karimov visited FAW’s production plant and learned about FAW’s vehicle models, production process and production technology. Sayyed Karimov indicated that FAW’s vehicle models are suitable for the market demand of Uzbekistan in terms of comfort, practicality and price, and he was confident to complete the 12,000-unit sales volume within three years. He was also optimistic about the cooperation with FAW.
Mr. Wang Yunfei, head of FAW, thanked Uzbekistan economic and trade team for their visit and agreed with Sayyed Karimov that FAW’s products were compatible with the mass consumer market in developing countries. Mr. Wang expressed FAW’s willingness to carry out long-term cooperation on mutually beneficial projects, continue to develop more products suitable for Uzbekistan and achieve great success with Uzbekistan partners.
About Chijet Motor Company, Inc.
The primary business of Chijet Motor is the development, manufacture, sales, and service of traditional fuel vehicles and NEVs. State-of-the-art manufacturing systems and stable supply chain management enable the Company to provide consumers with products of high performance at reasonable prices. In addition to its large modern vehicle production base in Jilin, China, a factory in Yantai, China will be dedicated to NEV production upon completion of its construction. Chijet Motor has a management team of industry veterans with decades of experience in engineering and design, management, financing, industrial production, and financial management. For additional information about Chijet Motor, please visit www.chijetmotors.com.
Chijet Motor Contact:
2888 Dongshan Street
Gaoxin Automobile Industrial Park
Jilin City, JL. P.R.China
0535-2766202
EMAIL: info@chijetmotors.com
Investor Relations Contact:
Skyline Corporate Communications Group, LLC
1177 Avenue of the Americas, 5th Floor
New York, NY 10036
Office: (646) 893-5835 x2
Email: info@skylineccg.com
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Chijet Motor’s actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “might” and “continues,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, statements regarding Chijet Motor’s leadership team, Chijet Motor’s continued growth and financial and operational improvements, Chijet Motor’s ability to develop and sell new or improved products, raise capital, deliver customer orders timely, execute its business plans, and attract and retain customers and skilled professionals; risks and uncertainties regarding fluctuations in earnings, fluctuations in foreign exchange rates, and general economic conditions affecting the Chijet Motor’s industry, along with those other risks described under the heading “Risk Factors” in the prospectus Chijet Motor filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2023, and those that are included in any of Chijet Motor’s future filings with the SEC. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Most of these factors are outside of the control of Chijet Motor and are difficult to predict. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Chijet Motor undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made except as required by law or applicable regulation.
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/276afbc2-3d27-4e23-b25e-b274137821c9
FAQ
What is the new agreement between Chijet Motor's subsidiary and Uzbekistan?
How many vehicles does FAW plan to sell in Uzbekistan under the new agreement?
What role will TANK AUTO play in the new agreement with FAW?
Who visited FAW's production plant from Uzbekistan?
What market does FAW's vehicle models target in Uzbekistan?
