Neta making massive layoffs, report says

One insider said Neta's layoffs could reach up to 70 percent, while another said the percentage varies by division and is not that high overall.

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Neta Auto, a unit of Chinese electric vehicle (EV) maker Hozon Auto, has become the latest to face operational difficulties.

Neta initiated massive layoffs today, with one insider saying the percentage could reach up to 70 percent, according to a report in local media outlet Cailian.

Another Neta insider said layoffs vary by department and are not that high overall, according to the report.

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A Neta source confirmed to Cailian that the company is undergoing an organizational restructuring, though the percentage of layoffs is unknown, the report said.

On October 29, Neta launched an all-employee equity incentive plan and announced that it would streamline its teams, make the business more focused, and reduce costs by flattening management.

Neta's parent company, Hozon, was founded in October and in April received approval from China's economic planner, the National Development and Reform Commission (NDRC), for its automobile production qualifications.

The Neta brand sells models including the Neta X, Neta GT, Neta S, Neta Aya, and Neta L in China, targeting a price range of between RMB 100,000 ($14,000) and RMB 200,000 yuan.

In June this year, Hozon filed an application to list in Hong Kong. But there have been no new developments since then.

In -, Neta has accumulated losses of RMB 18.38 billion, with gross margins of -34.4 percent, -22.5 percent, and -14.9 percent, respectively, according to its prospectus.

Neta's monthly car deliveries this year have been lower than the same period last year, except for January and July.

The company delivered 10,118 vehicles in September, down 23.41 percent year-on-year and down 8.06 percent from August, according to data compiled by CnEVPost.

In the January-September period, Neta delivered 85,908 vehicles, down 12.13 percent year-on-year.

The company did not release October delivery figures like its other local peers.

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One of Neta Auto&#;s key objectives for moving to the 3DEXPERIENCE platform was to speed up its product development cycles. The company&#;s previous product lifecycle management system was unable to keep up with its rapidly growing organization and product portfolio. Every new EV Neta builds adds a layer of complexity to the company&#;s value chain, creating the need for more transparent data sharing and communication, both internally and with suppliers.

&#;We face new challenges in styling design, engineering development and product production, including communication and collaboration with suppliers,&#; said Dai Dali, CTO of Neta Auto. &#;To become more efficient, we needed to accurately transmit data and share information in real time. By creating an environment for synchronous design, development and verification, we can shorten the R&D cycle from eight to six months and accelerate our product launches.&#;

Because Neta Auto&#;s engineering and process departments now have early access to design data, they can carry out design and engineering analysis in parallel and identify any system integration issues before progressing to the next stage of the development cycle. From here, they build detailed, accurate digital mock-ups (DMUs) of each vehicle. Achieving a continuous data flow from one stage to the next helps to avoid version control issues and reduce the inefficiencies of manually sharing data.

&#;We&#;re using the platform to construct a multi-configuration, multi-stage, module-level DMU, which helps to improve the quality of the first engineering prototype,&#; said Lu Ruozhen, deputy general manager of the Project Management Center at Neta Auto. &#;Before, when the general layout engineer arranged a new component in the vehicle, they would then export it to the design release engineers for specialized design, which was both inefficient and prone to error. The reduction in management costs by integrating the design structure and engineering bill of materials (BOM) through ENOVIA is evident, resulting in a clearer engineering perspective.&#;

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