Trade issues with China proved too big for HAAH

HAAH’s business plan shifted as it tried to bring in Chinese vehicles. At one point, HAAH worked to import vehicles from Zotye Automobile Co. It later proposed assembling crossovers in the U.S. from its more recent Chinese partner, Chery Automobile Co. HAAH created two new U.S. brands, Vantas and T-GO, to market the Chery crossovers.

For a while last year, Hale and other HAAH executives touted a “Made in America” plan as a way to reduce the impact of the 27.5 percent tariff on Chinese auto imports while also creating a consumer-friendly message of local hires. But a U.S. factory was never announced and HAAH returned to the import plan this year.

One dealer who had been enthusiastic about the “Made in America” label was Larry Battison, dealer principal at Battison Honda in Oklahoma City. He placed deposits for two sales points for a total of $300,000.

During the course of 2020, HAAH had said it was doing a nationwide search for an existing factory to assemble the Chery vehicles using semi-knockdown kits, which are basically containers with all the parts needed to build the vehicles. HAAH promised that local content would increase over time as it established a U.S. supply chain.

HAAH said it narrowed down its site search to three possibilities, but it never announced a factory choice.

“I’m just deeply disappointed,” Battison said last week after HAAH pulled the plug on the deal. “The whole time we were strung along about finding a plant to build cars or assemble kits in the United States and that they were looking for a parts distribution warehouse. But it was all talk and very little action.”

Battison said he understood the risk involved and that he was more upset about the optimistic message by HAAH right up until the venture fell apart.

“I don’t think it was fraud, but I think it was making some assumptions that were overly optimistic and leading the dealer body to think they were further along than they really were,” Battison said.

Hale said Battison and other dealers were never misled. Hale pointed to prospective Vantas and T-GO dealers who were more understanding of the challenges HAAH faced, such as George DeMontrond, president of DeMontrond Auto Group in the Houston area.

DeMontrond said last week that he was disappointed about the failure to bring the new brands to the U.S. market and about losing his group’s deposit on five sales points. But he doesn’t blame Hale and HAAH.

“My feeling about Duke and HAAH is still very positive,” DeMontrond said. “I think they did everything they possibly could to make the deal happen.”

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