As we step into the year 2025, the announcement from HYCAN Automotive, a brand in the burgeoning new energy vehicle market, signals a distressing reality — the company is nearing the end of its roadOn January 10th, this alarm was sounded as GAC Group, a major shareholder in HYCAN, detailed its plans for employee support amidst the company’s operational woes.

GAC Group communicated that they would be stepping in to assist, revealing a strategy wherein they will work alongside other shareholders to address employee layoff and compensation issues quicklyMeanwhile, their subsidiary, GAC Aion New Energy Automobile Co., will take over after-sales services for HYCAN productsThe firm’s commitment is framed as a corporate social responsibility initiative, illustrating a sense of duty to stakeholders and employees alike.

According to the statement provided to the press, GAC Group clarified that while it holds a stake in HYCAN, it has not been actively involved in daily operationsNonetheless, the company recognized the urgent need for intervention given HYCAN’s challenges. “By offering dedicated funds, we aim to ensure timely payment of salaries and severance, supporting a seamless transition in after-sales services,” they statedThis, they echo, is part of broader corporate responsibility, emphasizing a commitment to maintain stability within the industry ecosystem.

The ramifications of GAC Group's commitment reflect a deeper trend of shared interests among companies within the automotive sectorZhang Xinyuan, head of a research institute, articulated in an interview that this move is indicative of a growing collaborative spirit amidst fierce competition. “In an ever-challenging market, firms increasingly realize that cooperation is vital to navigating crises,” he noted, asserting that GAC's support not only aids HYCAN but also stabilizes the wider supply chain.

GAC Group's intervention comes as alarming news around HYCAN has amplified since late 2024, with reports of delayed employee payments and drastic layoffs flooding in

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The January 10 announcement disclosed that GAC intends to offer targeted loans proportional to shareholdings, indicating their financial backing to stabilize HYCAN’s faltering operations.

With their announcement, GAC Group articulated that the intention is to fulfill their responsibility to both employees and consumers in the face of dire circumstancesThey disclosed plans for a capital infusion of approximately 23.8 million yuan—subject to final accounting—to facilitate upcoming salary and compensation disbursementsGAC Aion’s role as the trusted party for HYCAN's after-sales service was meticulously estimated, with funding expected to exceed 174 million yuan to maintain operations over a future ten-year period.

In communication with media, GAC Aion representatives expressed willingness to leverage technical capabilities to support existing HYCAN vehicles, gradually opening service points to cater to existing customer needsThis grounded approach signifies a concerted effort to alleviate customer concerns while navigating HYCAN's operational transition.

This support initiative has drawn parallels with prior arrangements involving Baidu and Geely, where backing was provided to emergent automotive solutionsGAC Group’s proactive stance not only extends financial support to HYCAN employees but also directly takes on the aftersales burden, showcasing a multifaceted approach to corporate interdependence.

IPG China’s chief economist Bai Wenxi highlighted that this move signifies a shift towards greater cooperation among automotive companies amid a turbulent market landscapeAs competition heats up in the electric vehicle sector, GAC’s measures could serve as a blueprint for how other firms might respond to similar challenges while safeguarding their investments and upholding social responsibilities.

Despite these interventions, a murky cloud looms over HYCAN's futureReports indicate that the company’s Shanghai office is all but abandoned, with their Guangzhou headquarters functioning minimally amidst staggering staff reductions

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