(Yicai) Sept. 12 -- Chinese used car dealer Kaixin Auto Holdings said it will acquire WM Motor Technology after the cash-strapped Chinese electric vehicle startup, which is backed by Baidu, failed to go public in Hong Kong.

Kaixin Auto plans to issue new shares after signing a non-binding agreement to fully acquire WM Motor, the Beijing-based buyer announced yesterday without disclosing further details.

WM Motor had planned to go public via a reverse merger with the Hong Kong-listed arm of Apollo Future Mobility Group, but the latter said on Sept. 8 that the deal had been dropped for a number of reasons, including global stock market turbulence, geopolitical conflicts, and financial market uncertainty.

“WM Motor's fashion technology product positioning and branding matched well with Kaixin's strategic development goals,” said Lin Mingjun, the dealer’s chairman and chief executive. “Through the intended acquisition, WM Motor will gain access to more capital support to enhance the development of its smart mobility business.”

Founded in 2015, Kaixin Auto is one of the main dealership networks in the premium used car segment and new car sales in China. It was listed in New York in May 2019, becoming the second Chinese used car firm to do so after Uxin Group.

In 2021, Kaixin Auto set up a new energy vehicle department with research, development, production, and marketing teams. In August, it bought all the assets and business operations of low-speed EV maker Henan Yujie Shidai Car and its brand Pocco EV.

Once one of China's most-promising EV startups, Shanghai-based WM Motor gradually fell behind the competition in the country's fierce auto market. This year, it has faced factory closures, employee salary cuts, property fee arrears, and dealer withdrawals.

Shares of Kaixin Auto [NASDAQ: KXIN] ended unchanged at 26 US cents apiece yesterday.

Editor: Martin Kadiev