HiPhi collapse sparks fleet warning over new car brands

Fleets are being warned to "tread carefully" when buying vehicles from non-established manufacturers, following the collapse of HiPhi.

The Chinese car marker, which was part of the Human Horizons group, filed for bankruptcy after it failed to secure funding to start production of its new range of electric cars.

HiPhi planned to introduce the new models to Europe this year, with UK sales expected to start by 2026.

Fleet Check managing director Peter Golding said: “Fleets obviously don’t want to find themselves operating vehicles from a manufacturer that fails in this manner and need to tread carefully.”

The demise of HiPhi comes just a few months after Fisker filed for bankruptcy in the USA.

Golding added: “The problem for fleets is that it is difficult to work out which of the new entrants have credibility. Hi Phi and Fisker were both producing what looked like convincing new models and seemed to have substantial financing in place, yet the latter is now selling off its remaining stock at a reported 80% discount while parts availability is next to non-existent."

Faced with an intensely competitive home market, Chinese brands are keenly eyeing Europe and the UK as an important growth market. 

Golding said: “We know there is considerable overproduction in China and it will be tempting for car makers to offer those models here at highly attractive prices but of course, those manufacturers are exactly the ones that are most likely to fail in the future.

“Our advice is to look to the Chinese manufacturers who are establishing genuine roots in Europe by creating franchise dealer networks, parts distribution hubs and ideally, also investing in manufacturing capacity here, too. Those car makers might not be the cheapest but are the ones who are planning to be here for the long haul and want to form genuine, ongoing partnerships with fleets.”