Uxin, a leading e-commerce service for buying and selling used cars in China, has received RMB1.5 billion ($206 million U.S.) investment commitment from Hefei North City Construction Investment Group, which manages state-owned assets.
The funding, to be disbursed in multiple installments over the next decade, will be used to operate and develop Uxin’s used-car super store in Hefei City, according to an announcement from Uxin.
With 450,000 square meters of covered area, the superstore has recently commenced operation with reconditioning facilities and warehouse-style showrooms to showcase up to 10,000 vehicles.
Despite the investment, which will keep the Hefei Construction Investment’s equity ownership in Uxin Hefei to less than 50%, Uxin can exercise rights to repurchase equity stakes. In addition, the funding will not dilute shares of Uxin listed on Nasdaq.
“Hefei City’s strategic location, conducive business environment, developed automotive industry, and mature upstream and downstream supply chains provide tremendous support for Uxin’s business growth. With the continued support from the local governments, we are now better positioned to concentrate resources and produce high-quality used cars in advanced factories,” said Kun Dai, CEO of Uxin.
“Additionally, we aim to provide a top-tier retail service experience grounded in new retail concepts as well as improve our efficiency in vehicle operations at a super-large-scale by leveraging our digital capabilities. These efforts align with our mission to transform and elevate China’s used car industry.”
In a results statement, Uxin CFO Feng Lin said the company regained growth traction with more than 100% growth in retail transactions and recovery in gross margins despite the market challenges. The company’s revenue grew 26% to $300 million during the financial year to March 2023.