Startup car company unveils prototypes in Miss.

Published 3:43 am Thursday, October 8, 2009

A startup car company run by a Chinese businessman unveiled four prototype vehicles on Tuesday that it hopes to build at a planned car plant in northwestern Mississippi.

GreenTech Automotive Inc. wants to raise money from foreign investors to open a $2 billion plant on 1,500 acres in Tunica County, south of Memphis, Tenn., and eventually turn out 250,000 fuel-efficient cars a year.

GreenTech’s owner, Xiaolin “Charles” Wang, told The Associated Press that information provided earlier by the company’s attorney that it hoped to produce 1 million cars annually in a $6.5 billion plant was incorrect. He said such an ambitious plan would be unrealistic.

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Instead, Wang said Tuesday that the plant hopes to eventually employ 4,500 people and produce up to 250,000 fuel-efficient cars a year. The first phase would cost about $1 billion and produce 150,000 cars.

GreenTech has not yet purchased the property, and an incentive package is still being negotiated, said Tunica County Chamber of Commerce President Lyn Arnold. Wang said the company has an option to buy the land.

Dozens of people gathered for the unveiling of four vehicles, which were draped with red cloth before a ceremony at Harrah’s casino in Tunica.

The prototypes were built in China. They included a midsize four-door hybrid designed to get 50 miles per gallon, a zero-emissions electric car, a high-efficiency gasoline car designed to get 65 mpg and a hybrid sports coupe designed to get 45 miles to gallon and to go from 0 to 60 mph in less than 5.9 seconds. The company says the cars would match more stringent emissions and fuel-consumption standards that President Barack Obama’s administration wants automakers to meet by 2016.

Company attorney Bill Brabec first told AP that GreenTech eventually would build 1 million cars a year. Wang said Tuesday the figure came from his former business partner before they split in an ugly federal lawsuit.

“That was never my vision,” Wang said.

Still, 250,000 hybrid vehicles a year is a lofty goal because that’s “basically the entire market” for the hybrid Toyota Prius, an established brand from a trusted company, said Larry Rinek, a California-based consultant who works with major auto manufacturers and suppliers on hybrid issues.

“It’s a very uphill battle,” Rinek, who did not attend the ceremonies in Mississippi, said in a telephone interview. “It’s not impossible, but they have to do everything right.”

Wang said 60 to 80 more of the cars will be brought to the United States for testing to meet Environmental Protection Agency regulations.

Wang said production is three years away, so it’s premature to estimate a price for the cars. He also declined to speculate on when site preparation would begin for the plant.

Rinek said Wang’s goal of rolling cars off the line in three years will be hard to meet and the company must clear several hurdles: building a plant, passing crash tests, meeting EPA standards and developing a dealer network.

“That is going to be tough from a plant that is just a green field today,” Rinek said.

Plans for the GreenTech project were first revealed in June, when a messy lawsuit between Wang and his former partner, Yung “Benjamin” Yeung, became public.

It’s not immediately clear how much money has been raised to make the project happen. The plan before Yeung and Wang split was to raise money through a visa program that provides foreign investors with a chance to get a visa by investing in the United States.

Taylor Beery, president of Gulf Coast Automotive Fund, said Tuesday his group is authorized by the Department of Homeland Security to work with investors in the project through the EB-5 program, which offers foreign investors two-year green cards for themselves and their immediate families for $500,000 investments.

Once jobs are created and the investors meet program requirements, they can apply for permanent citizenship. Beery did not say how much money has been raised.

GreenTech was formerly known as Hybrid Kinetic Automotive Corp., but that changed after Wang and Yeung split. The men fought for control of the company and accused each other of dubious business practices before reaching a settlement in July.

Yeung has said he’s now planning to build a plant in south Alabama to produce up to 1 million vehicles a year by 2018. Yeung recently announced a goal of raising nearly $7.9 billion from private investors.

“I’m quite skeptical about both ventures and their planned output,” Rinek, the analyst, said Tuesday. “It’s not clear that these business plans have been vetted.”

Yeung, also known as Yang Rong, was celebrated in China for leading Brilliance China Automotive Ltd. to become first Chinese company to be listed on the New York Stock Exchange in 1992. He later fled China after Chinese authorities accused him of unspecified economic crimes. He has denied any wrongdoing.

Court filings in the case said Mississippi Gov. Haley Barbour had been involved in discussion about the plan but Barbour’s office has declined to comment, citing the need for confidentiality in proposed economic development projects.

Wang said Tuesday that Mississippi Development Authority officials brought him to the Tunica site last July. Former President Bill Clinton also has been active in the project, traveling to Hong Kong and introducing company representatives to heads of state at his recent global initiative, Wang said.

Mississippi is home to one automobile manufacturing plant, and another is planned but is on hold.

Nissan opened its plant in 2003 near the central Mississippi city of Canton. Toyota announced in early 2007 that it would open a plant near Tupelo, in northern Mississippi, by late 2009 or early 2010. Toyota’s plans have been put on hold indefinitely amid the global economic slowdown.

Gulf Coast Automotive Fund: