- Scooter manufacturer Vmoto Limited (VMT) will team up with Super Soco Intelligent Technology to establish a joint manufacturing company
- Once it’s up and running, the new company will act as the exclusive manufacturer of both Vmoto’s and Super Soco’s electric scooter and motorcycle products
- Registered in China, the company will operate under the name Nanjing Vmoto Soco Intelligent Technology
- The agreement will offer a 50 per cent stake in the venture for each party
- Shares in Vmoto are currently trading down 1.64 per cent at 30 cents each
Vmoto Limited (VMT) has signed an agreement with Super Soco Intelligent Technology to establish a joint manufacturing company.
Once in operation, Nanjing Vmoto Soco Intelligent Technology will act as the exclusive manufacturer of both Vmoto’s and Super Soco’s electric scooter and motorcycle products.
Each party will hold a 50 per cent stake in the new company, which will be registered in China.
Vmoto expects the new agreement will significantly de-risk its operations, while simultaneously strengthening its long-standing partnership with Super Soco.
The two have enjoyed a successful relationship since 2017, with Vmoto delivering strong sales growth for the Super Soco products, as well as its own E-max products.
Managing Director of Vmoto, Charles Chen, said the agreement is a great result for the two companies.
“With the combination of Vmoto’s international sales and marketing experience, together with Super Soco’s development capability, we have a very strong market position globally,” he said.
“By joining forces on manufacturing, we will now be able to achieve economies of scale and favourable trading terms not available to each of us on our own.”
Vmoto will retain exclusive sales and marketing rights globally (excluding China) for the E-max and Super Soco products.
Chief among a range of benefits is the synergy of production capabilities, which will reduce lead times and allow faster delivery of products to customers.
Vmoto Soco will also have access to more than 100 qualified suppliers, resulting in a sophisticated supply chain that will support future product development.
“We are very delighted to have entered this joint manufacturing company with our trusted partner Vmoto,” said Super Soco CEO, Sherman Xie.
“With the establishment and support of our new joint manufacturing company, we can compete in our domestic and international markets more ambitiously…”
Under the terms of the agreement, Super Soco will phase out and permanently close all of its manufacturing operations within two years.
The company will also provide Vmoto Soco use of all its patents and moulds for the manufacturing of Super Soco products.
Profits from the joint company will either be reinvested or distributed between Vmoto and Super Soco according to their relevant interests at the time.
Shares in Vmoto are currently trading down 1.64 per cent at 30 cents each, with a market cap of $68.55 million.