In Survival Mode, Fisker Looks to Middle East and China
Tony Posawatz, CEO of plug-in electric vehicle maker Fisker Automotive, is a really cheerful guy. That was my impression when I interviewed him last week at the Los Angeles Auto Show during the media days. And that is admirable given that he heads a company that faces questions of survival. Fisker is nonetheless forging ahead with development of dealer networks in locations outside the United States.
Fisker’s current model, the Karma, has experienced a series of issues including breaking down during a Consumer Reports test drive. Still, the company has managed to ship 2,000 Karmas as wholesale orders, and has sold more than 1,500 units, said Posawatz. By my calculation that means Fisker has around 500 units available for customers. But when I asked him about the recent loss of 300 Karmas due to Hurricane Sandy he said that was unfortunate because “we have customers waiting for our Karmas.” Like I said, Posawatz is an optimistic guy. The lost Karmas were insured, said Posawatz, adding, “We of all companies have to be nimble and resilient when things like that happen.”
Fisker has 43 dealers in the U.S. now. Posawatz was vague on how many it eventually planned for the U.S. “The number of dealers will probably fluctuate over time until we reach a steady state,” he said.
When I spoke with him, what got him excited was talking about building out dealer networks overseas. Fisker has signed the Dubai-based Al-Futtaim Group to distribute its vehicles in the Gulf Cooperative Council and the rest of the Middle East. The GCC, as it is usually known, consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. There is a lot of money there. Maybe Fisker should look for investors in the GCC at the same time it sets up dealerships.
Finalizing the GCC deal and working on distribution in Europe has been occupying Fisker’s time lately and it has delayed its China launch until next spring—initially Fisker said it would launch in China already by now. Posawatz was high on China, where Fisker has signed a distribution agreement with China Grand Automotive Group.
China Grand’s footprint is mainly in China’s inland provinces; it doesn’t have stores in China’s retail and financial capital Shanghai or its political capital Beijing. I questioned the wisdom of this choice in an earlier posting on PluginCars.com. A Fisker spokesman told me that they figured that there was enough new money in China’s inland provinces to find a market for Fisker’s pricey vehicles.
In any case, it appears China Grand doesn’t have an exclusive deal with Fisker. Posawatz said it would be “premature to suggest this is the only solution we have, but like any opportunity in a new region you got to start somewhere.” Posawatz also said Fisker was interested in eventually finding a manufacturing partner in China. “At some point in time it is very likely we will have a strategic partner there like all the other big car companies do in order to make the cars a little more cost effective there,” he said.
Fisker Atlantic Project Remains Stalled
Though Posawatz said Fisker is getting its Delaware plant ready for production, the company has only taken $190 million in federal loans. So it could back out of the Delaware location at some point and produce the cars instead in China.
The Atlantic, Fisker’s next plug-in vehicle, has been on the development table for a long time. And we don’t really know how much longer it will be there because the project is on hold as Fisker seeks more funding. “We need another small tranche to be able to take the Atlantic program to the next stage of development,” Posawatz told PlugInCars. With small and start-up companies, “funding is always on the list of a CEO’s things to do,” he said.
Meanwhile, company spokesman Roger Ormisher said Fisker is busy modeling, doing virtual parts development, and identifying potential suppliers for the Atlantic, a car that is expected to be more affordable and family-oriented than the Karma. But Fisker won’t be placing any orders until all the financing is in place, he said.
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