Produced in the Mainland, assembled in Hong Kong, Bentley entered Hong Kong to build cars to verify the new business model

After nearly three years of preparation and qualification search, BEYONCA announced on June 28 that it would build its headquarters and vehicle factory in Hong Kong, and implement the car manufacturing plan in the mode of production in Hong Kong and assembly in Hong Kong. If all goes well, Bentley Motors will become Hong Kong's first electric vehicle company.

Bentley Motors was founded in 2021 by Su Weiming, a former Volkswagen China executive and current CEO of Renault China. Unlike other new car brands, Bentley has a strong background, with Dongfeng Motor Group and Renault Group being the two founding shareholders of Bentley, which is technically the entrepreneurial project of two traditional mainstream car groups in China and abroad.

Bentley's products are positioned as luxury smart electric vehicles. In October 2022, Bentley unveiled its first model, the Gran Turismo Opus 1 Concept, in Beijing, which features a GT-like styling and is expected to cost more than one million yuan in production.

Since 2023, news has continued to come out about Bentley's financing and cooperation with local governments, but there has been no accurate information on key issues such as where the manufacturing base will be located and how to obtain automobile production qualifications. Dongfeng and Renault are thought to be the ones that will help, with Dongfeng most likely acting as the OEM. But now it seems that Binley has chosen to take a different path.

According to the announcement of Bentley Motors, Bentley Motors will settle in the Tseung Kwan O Innovation Park, a subsidiary of the Hong Kong Science and Technology Parks Corporation, and set up an international headquarters, a vehicle assembly plant and four major centers, namely a vehicle R&D and artificial intelligence center, a marketing center, a customer experience and smart health service center, and a big data center.

According to a person from Bentley, making a car in Hong Kong also needs to meet the corresponding requirements and restrictions on commercial terms, and Bentley is still in negotiations with the Hong Kong Special Administrative Region government. Due to the unique model, there are no corresponding specifications and cases to follow for the identity authentication of products and market sales.

Since last year, a number of mainland auto industry chain companies such as CATL, Horizon and Nezha Automobile have announced their investment in Hong Kong. With the integration of mainland resources and Hong Kong's international trade environment, a new automotive ecosystem and industrial model is expected to emerge.

Solve the problem of production qualification?

"BEYONCA will leverage Chinese mainland's leading supply chain system and rich international talents in the Guangdong-Hong Kong-Macao Greater Bay Area to bring high value-added IP R&D, artificial intelligence development and assembly business to Hong Kong, and achieve zero breakthroughs in Hong Kong car manufacturing through the innovative mainland-port manufacturing linkage model, becoming the first international luxury electric vehicle brand MADE IN HONG KONG (香港智造)." Su Weiming said that Binli will adopt a unique business model of 1+3 to realize the linkage of inland port manufacturing industry. Specifically, "1" refers to the construction of intelligent cockpits, artificial intelligence, and high-quality super assembly plants for the production of luxury cars in Hong Kong, and "3" refers to the three major production processes of stamping, welding and painting, which will be completed in the mainland parts industrial park.

In other words, Bentley split the four major processes of automobile production, with the first three steps being completed in mainland China and the last step being assembled in Hong Kong. This model is unprecedented, and from the perspective of car manufacturing, the biggest advantage is that it avoids the biggest threshold for car manufacturing in the mainland: it must have the qualification to build a car.

Ten years after the rise of the new car boom in China, the channel for obtaining automobile production qualifications has become narrower and narrower: the issuance of new qualifications has stopped for many years, and the opportunity to obtain qualifications through mergers and acquisitions has become smaller and smaller. In 2023, NIO, which has experienced 7 years of labor, will finally obtain independent qualification through the acquisition of the JAC factory; The Xiaomi car launched this year has obtained its qualification through self-built factories and government resources. For Binli, the possibility of obtaining a new qualification through a special channel is almost non-existent, and foundry has always been considered its first choice.

In terms of how to implement the car-making plan, Su Weiming is always looking for a new model. As a Singaporean senior professional manager with 30 years of experience in the China business sector of a number of multinational car companies, Su Weiming has both local and international resources and contacts. However, as far as the path to obtaining a birth permit is concerned, in the field of automobile qualifications, which is already extremely scarce, there is not much room for Bentley's operation.

In May 2021, BeyonCa HK Limited, invested by Dongfeng and Renault, was established, and a month later, Beijing Bentley Information Technology Co., Ltd. (hereinafter referred to as "Bentley Technology"), the main company of Bentley Automobile Group, was established. In November of that year, Bentley Technology and Great Wall Huaguan Automobile R&D Co., Ltd. established Beijing Bentley Automotive Technology Development Co., Ltd. (hereinafter referred to as "Bentley Technology Development") with a shareholding ratio of 80:20. Great Wall Huaguan Automobile R&D Co., Ltd. is a subsidiary of Great Wall Huaguan Automobile, which once launched the future brand electric sports car, but due to poor market performance, the brand was reduced to a marginal enterprise at the time. Binli is thought to be a possible debut with the help of Great Wall Huaguan's qualifications. However, Great Wall Huaguan withdrew from Binli Technology Development in July 2022.

In the three years since its establishment, Binli's car-making dynamics have mainly revolved around the possibility of cooperation with Dongfeng. In February 2022, Bentley and Wuhan Changjiang Capital reached a cooperation agreement to jointly establish the Hubei New Energy Vehicle Industry Fund, with a planned investment of more than 10 billion yuan to build a passenger car industrial base and supply chain ecology covering vehicle production lines in Wuhan. At the same time, two executives of Dongfeng Motor Group, Liao Xianzhi and You Zheng, are on the list of executives of Binli Technology. This collaboration has deepened the relationship between Binli and Dongfeng. The industry has speculated that Dongfeng Motor will be the OEM for Bentley, and Dongfeng Motor's headquarters in Wuhan will also become Bentley's car manufacturing base.

In October 2023, Bentley signed a memorandum of understanding (MOU) with Saudi Arabia-based investment group Al Faisaliah Group Holding Company (AFG) to take a share of the investment boom in China's electric vehicles from Middle Eastern capital. However, it is not yet known whether Middle Eastern capital will be available on time. Another new car manufacturer, Gaohe Automobile, which is favored by Middle Eastern capital, did not wait for the investment to be fully implemented until the capital chain was broken.

In December 2023, at the Renault Group headquarters in Paris, France, Bentley signed a strategic cooperation agreement with the People's Government of Zhuji City, Zhejiang Province. However, it remains to be seen how this cooperation will be carried out, and the local car investment project is known to the outside world as another new car-making power, Tianji Motor, which is already in a state of discontinuation.

As to whether Bentley chose to build a car in Hong Kong in order to solve the qualification problem, Bentley has not yet responded.

Regardless of whether Bentley's "Made in Hong Kong" model is already in the planning, in terms of investment, financing and cooperation with local governments in the past two years, Bentley has already made corresponding arrangements in the mainland and Hong Kong, and its mainland production base may be located in Wuhan, where the automotive industry chain is mature.

According to people familiar with the Binley project, building a car in Hong Kong needs to meet the corresponding requirements and standards, although it will be easier than the mainland, but there will be some restrictions on commercial terms. According to the policy requirements of the mainland, car manufacturing needs to obtain a unified production qualification, and the product needs to be listed in the catalog of the Ministry of Industry and Information Technology before it can be sold. As Bentley's model of transferring Hong Kong products to mainland sales is currently unique, there are still many negotiations on which certifications need to be met and what licenses need to be obtained.

Hong Kong's automotive ecosystem has begun

Bentley's choice to build cars in Hong Kong is quite in line with Hong Kong's economic development plan in recent years. In December 2022, the Hong Kong Innovation, Technology and Industry Bureau (ITIB) promulgated the Hong Kong Innovation and Technology Development Blueprint (the Blueprint), which sets out a clear development path and systematic strategic plan for Hong Kong's I&T development in the next five to ten years, leading Hong Kong to realise its vision as an international I&T hub.

The Blueprint sets out four major directions for Hong Kong's I&T development: improving the I&T ecosystem and promoting Hong Kong's "new industrialization"; expand the talent pool of science and technology innovation and enhance the momentum of development; promote the development of the digital economy and build a smart Hong Kong; Actively integrate into the overall development of the country, and do a good job of bridging the mainland and the world.

New energy vehicles (NEVs) are an important platform for Hong Kong to achieve "new industrialisation". Before mainland auto companies entered Hong Kong, there were also electric vehicle R&D projects in Hong Kong. Wang Xiaolin, the founder of Sailin Automobile, had put into production a small electric vehicle Mycar in the United States in 2012, and the idea of the car was born in a design project of the School of Design of the Hong Kong Polytechnic University in 2002. In 2010, Wang's GTA acquired EuAuto and redesigned Mycar.

As far as mainland car companies are concerned, Binley is not the first to enter Hong Kong. In March 2024, Nezha Automobile signed an agreement with the Hong Kong Special Administrative Region Government, according to which the Hong Kong Special Administrative Region Government will provide Nezha Automobile with a subsidy of HK$200 million and assist in the investment of US$200 million in Cornerstone Round. It is reported that Nezha Automobile has set up an overseas center in Hong Kong, and plans to establish an overseas intelligent R&D center and a big data center, as well as a production base. On June 27, Hezhong New Energy, the parent company of Nezha Automobile, submitted a listing application to the Hong Kong Stock Exchange, becoming one of the new car companies vying to list in Hong Kong.

In addition to vehicle manufacturers, companies in the automotive industry chain have also begun to use Hong Kong as an investment destination. In December 2023, CATL, a leading power battery company, signed a contract with Hong Kong Science and Technology Parks Park, announcing that it will set up a technology innovation and research center and an international investment center in Hong Kong Science and Technology Park, with a total investment of more than HK$1.2 billion, and will drive its upstream, midstream and downstream partners to develop in Hong Kong. At the same time, Black Sesame Smart and Horizon also signed a contract with the Hong Kong Science and Technology Parks Corporation at the end of last year to set up an innovation and R&D center in the park.

At present, Hong Kong's automotive industry chain is still in the initial construction stage, and Bentley's choice of the "1+3" model can be seen as a compromise solution, with the aim of bringing products off the assembly line as quickly as possible. Su Weiming said that from 2025 to 2030, luxury electric vehicles will enter a high-growth stage of the S-curve, so these five years will also be the best window period for the luxury car market. Previously, it was reported that Bentley's first car is scheduled to be launched this year.

Although the problem of manufacturing cars in Hong Kong can bypass the problem of production qualifications, the uncertainties of this manufacturing model are also obvious, including how to define the identity of Bentley and how to better control costs in terms of manufacturing in both places and reselling to the mainland. Of course, Hong Kong's advantages as an international port will help Bentley plan to go overseas in the future.