(Yicai) April 1 -- Hozon Auto, the owner of electric vehicle brand Neta, will launch a series of cost-cutting measures such as concentrating its production in eastern China's Tongxiang after sales plunged last year.

Once an upgrade is ready, Hozon's existing plant in Tongxiang will have an annual capacity of 200,000 units by year-end and that should eventually rise to 300,000 units to realize economies of scale, Chief Executive Zhang Yong said to Yicai recently.

Founded in 2014, Hozon launched its EV brand Neta in 2018. The company once topped the list of Chinese EV startups with almost 152,100 units sold in 2022. But as the competition intensified with new brands and price wars, sales of Neta-branded vehicles slumped by 16 percent to nearly 127,500 units last year from 2022.

The company has three domestic factories, including one in Yichun in southeastern China's Jiangxi province and one in Nanning, the capital city of the Guangxi Zhuang Autonomous Region. Currently, each of them is estimated to have an annual capacity of 100,000 units.

Chinese news outlet IFeng.Com reported earlier that the Nanning facility already halted production last month due to overcapacity.

CEO Zhang said that by focusing on one location, Hozon can slash its labor cost by half while its manufacturing cost per unit can be reduced by CNY3,000 to CNY4,000 (USD415 to USD553). The firm also plans to stop producing certain products with negative profit margins that are not likely to improve in the short term while releasing more high-end products.

Hozon will continue to invest more overseas, Zhang said, adding that the firm plans to sell its vehicles in 60 countries and regions worldwide by year-end. Another goal is to achieve annual sales of 100,000 units abroad in the upcoming one or two years, he added.

Overseas sales surged by almost seven times to 20,000 units last year from the year before. Moreover, Hozon's first plant abroad came on stream in Thailand in November and the firm expects to start operating two more foreign factories in Indonesia and Malaysia in May and next January, respectively.

Editors: Dou Shicong, Emmi Laine