The Chinese media has been reporting that Israel Corporation (TASE: ILCO) plans quitting the Qoros joint car venture with automaker Chery. However, Israel Corp. controlling shareholder Idan Ofer has written to the "Wall Street Journal" reiterating the Israeli company's support for the venture.
Ofer wrote that he is, " “looking forward to competing all over the planet with established OEMS (original equipment manufacturers)", and added that there is “no doubt that we will grow this company to be a respected, profitable OEM, starting in China, our home market.”
Israel Corp. has invested $600 million in Qoros to date, double the amount that it invested in the failed electric car venture Better Place.
Israel Corp. wrote in its financial report for the second quarter that Qoros was examining its business plan and that additional financing might be required. Losses widened to $78 million in the second quarter and total losses in the first half of 2014 were $137 million.
The situation is expected to worsen in the near future with new cars being launched. The financial report said, "Qoros expects a significant increase in costs and the company is not expected to reach profitability in 2014-2015."
Published by Globes [online], Israel business news - www.globes-online.com - on November 6, 2014
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