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North Bay Business Journal

Monday, September 19, 2011, 6:45 am

Zap Jonway obtains new rounds of financing in China

By Loralee Stevens, Special to the Business Journal

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    The Zap facility on Donahue in Santa Rosa

    SANTA ROSA — Zap Jonway last week announced two new rounds of credit financing from China Merchants Bank totaling $37.33 million for expansion plans in China as recent Securities & Exchange Commission filings indicate a shakeup in its U.S. presence.

    Among the U.S. developments was the Sept. 1 resignation of Zap President  Gary Dodd, who also owned Zap Motor Manufacturing Kentucky. On June 30, a Zap SEC filing said that COO Dave Jones had left the company and that Zap was looking for a new COO with experience in the automotive industry in China and internationally.

    The Santa Rosa Zap showroom at 501 Fourth St. was shut several months ago. The company maintains a warehouse at 806 Donohue.

    Meanwhile, Zap’s majority-owned Chinese subsidiary Zonway has obtained a $21 million line of credit from China Merchants Bank to expand its operations in Zhejiang Province, according to a document filed on Aug. 11. It received an additional $16.33 million last week.

    Zap was founded by Gary Starr during the 1970s and incorporated in 1994, growing to 50 employees in Santa Rosa. Following its 2011 acquisition of Chinese SUV maker Jonway, U.S. CEO Steve Schneider was joined by Chinese co-CEO Alex Wang. Mr. Wang, his father and sister control Jonway.

    Mr. Wang in a 2010 press release said Zap was expected to expand its market from China to the rest of the world, using generous incentives from the Chinese government to fuel the company’s growth.

    During a November 2010 interview board member Priscilla Lu of Cathaya Capital, a major investor in Zap, said China wants to be the world leader in electric vehicles.

    “The government subsidizes electric vehicles at about $9,000 and large cities like Beijing and Shanghai add another $9,000. That’s over three quarters of the cost, and the subsidies go to the manufacturer, not the car buyer,” she said.

    At the time of the interview, Ms. Lu and Mr. Schneider told The Business Journal that producing Zap electric vehicles alongside Jonway gasoline-fueled vehicles in Jonway’s ISO 9000-certified, 3.6 million square foot plant in the city of Sanmen would allow the new company, Zap Jonway, to offer them at the lowest possible prices.

    Neither Ms. Lu or Mr. Schneider or other company executives could be contacted to comment on Zap Jonway’s current operations, including its future in Santa Rosa.


    Correction, Oct. 6, 2011: Priscilla Lu is founder and general partner of Cathaya Capital, and Gary Starr founded Zap.

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    Comments

    1 Comment

    1. October 5, 2011, 11:01 pm

      by Chester

      Dr Lu is with Cathaya Capital NOT Cathay Capital those are 2 separate companies and NOT related.


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