Aug. 22 (Bloomberg) -- Liu Yonghao, who rose from penniless pig-feed salesman to billionaire banker, is now trying his hand at selling cars.
Liu’s closely held New Hope Group, which has interests in chemicals, real estate and financial services, signed an agreement with car retailer E-Kingo Automotive Trade Co. to jointly build 200 dealership plazas in China, according to the two companies. The former schoolteacher, who co-founded China Minsheng Banking Corp., has a net worth of $6.2 billion, according to the Bloomberg Billionaires Index.
The move into vehicle distribution follows losses in China’s animal husbandry sector as an outbreak of bird flu and discovery of thousands of dead pigs in a Shanghai river hurt poultry and pork sales. China surpassed the U.S. in 2009 as the world’s largest vehicle market and annual deliveries may double to 40 million units by 2030 from this year, according to the China Association of Automobile Manufacturers.
“Both companies see great opportunities in the vehicle distribution and services business because cars are a major shopping item for people who want to enhance their living standards,” Liu Wei, vice president of Chengdu, China-based E-Kingo, said in a phone interview. “The two partners are making preparations for the new company and will release our business plan when we start operations.”
He declined to say when operations will begin or confirm that the companies will invest a total of 200 billion yuan ($33 billion) over five years to build the facilities, reported earlier by West China City Daily and posted on E-Kingo’s website.
New Hope and E-Kingo will build the plazas, which will house multiple dealerships selling different auto brands, in China’s small- and medium-sized cities to provide comprehensive services to motorists including sales, maintenance, insurance and used-car distribution, E-Kingo’s Liu said. The two companies may also explore possibilities to offer more diversified services such as catering and entertainment in those shopping plazas, he said.
New Hope’s Beijing-based spokeswoman Li Jia confirmed the joint venture and referred queries to E-Kingo.
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