MONTGOMERY, Ala. -- Hybrid Kinetic Motors Corp. officials said Tuesday the company is on track to raise $1.3 billion this year in an effort to build a mammoth auto assembly plant near Bay Minette.
The news came as the company signed a four-year contract worth 400 million euros (about $570 million) with leading auto design and engineering firm Italdesign-Giugiaro SpA. HK Motors and the design team showed off a concept car that the Italian firm created in 2008 as inspiration for the high-mileage, multi-fuel cars that HK Motors wants to build.
"Our mission is to develop cars with American style, European quality and Japanese price," HK Chairman Yung "Benjamin" Yeung told an audience of about 300 that included many Baldwin County officials and business leaders.
A unique concept
MONTGOMERY, Ala. -- Italdesign-Giugiaro SpA created the Giugiaro Quarante, which means "Forty" in Italian, to celebrate its fourth decade in the car business. A center driver's seat is flanked by two passenger seats, with an infant seat in the rear.
The car, with a solar panel, has a large bonnet that hinges up overhead, instead of doors. Many onlookers at Tuesday's unveiling likened it to the DeLorean DMC-12, a stainless steel sports car crafted by Italdesign-Giugiaro and featured in the "Back to the Future" movies.
"All it needs is a flux capacitor," Alabama Gov. Bob Riley said, after trying out the driver's seat.
"I'd love to have this sitting under my carport," said state Rep. Harry Shiver, R-Bay Minette, as he squeezed into the car along with Bay Minette Mayor Jamie Tillery and Bay Minette City Councilman Chris Norman.
Hybrid Kinetic Motors Corp. Chairman Yung "Benjamin" Yeung and Italdesign-Giugiaro founder Giorgetto Giugiaro worked together in the mid-1990s when Yeung ran Brilliance China Automotive Holdings, to design the Zhonghua car, the first car designed specifically for a Chi' nese company.
Fabrizio Giugiaro, co-chairman of Italdesign- Giugiaro and son of the founder, said his firm and HK Motors jointly chose to present the wedge-shaped Quarante, which was built with a Toyota hybrid powertrain, to show HK Motors' future-oriented thinking. Italdesign-Giugiaro is supposed to design 10 vehicles for HK Motors, and the co-chairman said vehicles for the American market would likely be more conservative.
"I believe today we have the possibility of expressing a new way of doing style," Giugiaro said, saying HK Motors was a "virgin" company that provides a blank canvas to re-imagine the auto.
"The concept car underscores the credibili' ty of Italdesign," said HK Motors Vice Chairman Charles Huang. "It also underscores its capabilities in hybrid engineering."
HK Motors hopes to sell various vehicles for prices ranging from $20,000 to $60,000.
-- Jeff Amy
HK Motors has said it plans to invest $4.3 billion in a Baldwin County complex that could eventually employ about 5,800 and produce 1 million vehicles annually by 2018. Company officials said that they plan to break ground before the end of the year, and begin production at 300,000 vehicles a year in early 2013.
The project is dependent on the firm raising billions from investors. Using the EB-5 visa program, Hybrid Kinetic is offering a path to U.S. citizenship for Chinese who invest at least $500,000 in the project. The company also would have to demonstrate at least 10 jobs created for each investment.
Charles Huang, vice chairman of HK Motors, said the company believes it will meet this years $1.3 billion goal called for in a Hong Kong stock filing submitted by Far East Golden Resources. That Yeung-controlled firm would become the parent company of HK Motors if stockholders approve in a vote scheduled later this month.
"We have investors ready to wire money into our bank account, but we have told them to wait until the results of the shareholder meeting," Huang said.
HK Motors plans have been greeted with skepticism, considering its unconventional financing, its lack of car-making experience, an unusual engine type and the huge proposed factory. At 1 million cars a year, HK Motors would turn out roughly 7 percent of all the cars projected to be sold each year in the United States in the mid-2010s. Thats about the market share Nissan had last year.
But Alabama Gov. Bob Riley and other officials voiced growing confidence that the plant would come to pass. Alabama Development Office Director Neal Wade said hed been to Yeungs house in Pasadena, Calif., five times to discuss the project.
"We are very convinced from the financial end that they are taking the steps to put this project on a firm financial foundation," Wade said.
Wade emphasized, though, that the state wants HK Motors to prove that it has between $1 billion and $1.5 billion in the bank before Alabama officials will sign any incentive deal, saying protecting taxpayers is paramount. Wade said he expected an incentive deal to be fleshed out in the coming months, and said its structure could differ from those signed with other large manufacturers.
"We want to know that if we put our money into it, we can get it back," Wade said.
HK Motors strategy calls for building as many as another million vehicles a year in China, and importing many parts to the United States from China to hold down costs.
Yeung was ousted from Brilliance China Automotive Holdings after accusations he tried to pocket state assets. Last year, Far East Golden Resources signed a deal to build engines, transmissions and electrical motors in the province that leveled the accusations, suggesting that dispute has been patched up.
Spokeswoman Lorenza Cappello said the HK Motors contract is the largest ever signed by Italdesign-Giugiaro, which has designed many other famous vehicles. Earlier, HK Motors signed a $250 million contract with German firm FEV for its engines, which are supposed to use natural gas as their primary fuel, but also be able to use electricity or gasoline, getting 45 miles or more to the gallon.
"This is our second-most important contract," Huang said, after the engine pact.