Behind rumors of bankruptcy of four car companies, fringe car companies are struggling

Image source: Internet, if there is any infringement, please contact us to delete. In the transformation of the four modernizations of the automobile, China's auto market has entered a downturn of negative growth for the first time in 28 years. Everyone knows that the elimination and upgrading of the automobile industry is accelerating, but they do not know how it will be promoted. Opening ceremony. Recently, an internal bank email posted online pierced this paper window. On October 9, a notice from Ping An Bank was exposed, requiring it to conduct an internal risk investigation on the upstream and downstream industrial chains of four car companies: Cheetah Motors, Zotye Motors, Huatai Motors, and Lifan Motors. The reason is that according to a media report, the above four companies The company will enter bankruptcy proceedings at the end of the year, and it is expected that the upstream and downstream auto parts supplier industry chain will be involved in bad debts totaling approximately 50 billion yuan. On October 10, "four car companies were rumored to be bankrupt" became a hot topic in the industry that day. Immediately afterwards, the companies involved quickly came forward to refute the rumors. Zotye Motors told Times Finance that the news was false information and it would reserve the right to pursue legal liability against those who continue to spread rumors. Later, Zotye Motors officially issued a "Clarification Announcement", stating that the company's current production and operations are normal, there is no insolvency and bankruptcy proceedings, and there is no information that should be disclosed but has not been disclosed. Zotye Motors also specifically listed the company's assets in the announcement. As of the first half of the year, the company's total assets were 30.531 billion yuan and total liabilities were 13.241 billion yuan. Lifan Co., Ltd. also issued an announcement stating that Lifan Motors mentioned in media reports would enter bankruptcy proceedings at the end of the year. This situation has been verified to be untrue; as of now, the company has no bankruptcy plan. Currently, the company has high debt and great liquidity pressure. Based on the current situation of China's automobile industry as a whole, future development may face challenges, and the company will actively take various countermeasures to reduce risks. Tian Yongjun, Party branch secretary and deputy director of Cheetah Auto Sales Headquarters, also denied the "bankruptcy" rumors in an interview with the media, saying that the reports were untrue and that the company was negotiating with the other party. Tian Yongjun said that Cheetah Motors "has no such thing as bankruptcy. It has never thought about going bankrupt, nor has it filed for bankruptcy." The company is currently working hard on production and operations. Regarding the spread of relevant picture information, Tian Yongjun said that "someone has ulterior motives." . As the other party involved, Ping An Bank responded that the bank regularly or irregularly conducts risk checks on existing customers based on macroeconomic conditions, industry and corporate operating changes and other information, which is a routine risk management action. At this point, the truth of the matter has come to light. It is really a rumor that the four car companies will go bankrupt at the end of the year. Behind the rumors, four car companies are in deep trouble, but there is no smoke without fire. Behind the scenes, the Chinese car market has entered a downturn of negative growth for the first time in 28 years. As the backbone of the local economy, OEMs have also connected many upstream and downstream companies to influence every move. whole body. On the other hand, after the downturn in China's auto market, the above-mentioned four auto companies are indeed struggling and their operating conditions are very difficult. On the evening of October 9, the listed company Sugon Co., Ltd. announced that all shares of Sugon Co., Ltd. held by Huatai Automobile have been judicially frozen for a period of three years. Prior to this, all shares of Sugon Holdings held by Huatai Automobile had been frozen many times. What is even more depressing is that in September this year, the Tianjin Binhai New District People's Court disclosed a property investigation into Huatai Automobile Group Co., Ltd. This company that once invested billions of yuan now only has 130,000 yuan in bank deposits on its books. Lifan Motors is also facing difficulties. Especially after entering the second half of the year, it is basically in a semi-stop production state. The monthly output of passenger cars is only a few hundred units, and both production and sales have plummeted year-on-year. Data shows that in the first eight months of this year, Lifan sold a total of traditional passenger cars. There were approximately 21,600 vehicles, a year-on-year decrease of 68.94%. In addition, Lifan is also deeply involved in debt and lawsuits. According to the announcement of Lifan Shares, the cumulative amount of undisclosed litigation (arbitration) involved in Lifan Shares in the past 12 months has reached 1.423 billion yuan. Similarly, as a long-established company with a history of 70 years, Cheetah Motors sold only 77,600 vehicles in 2018, nearly halving year-on-year. In the first half of 2019, its cumulative sales fell to 28,000 vehicles. In August this year, an internal meeting minutes document of Cheetah Motors showed that in view of the serious losses in production and operations, the meeting adopted salary adjustments, burden reduction and salary reduction to ensure survival and tide over the difficulties. Salary adjustments include a 50% salary reduction for some executives at the headquarters, a 10%-50% salary reduction for research institute employees, and a 30%-50% salary reduction for production base employees. Zotye Motors, a former copycat Internet celebrity, has also reached a career low. In the first half of this year, sales were 63,800 vehicles and net profit was 290 million yuan, a year-on-year decrease of 195.37%. While his career was not going well, Zotye was also entangled in negative reports about dealers' rights protection and the company's wage arrears. In September this year, a news report that Zotye Junma went bankrupt and went bankrupt triggered heated discussions in the industry. According to Automobile Commune, Junma Motors is about to be acquired by Sany Heavy Industry, which is mainly engaged in construction engineering machinery and equipment. Where do marginal car companies go from here? It is worth mentioning that the four car companies affected by bankruptcy rumors are only a microcosm of the current automotive industry. The number of car companies currently facing operating problems is far more than the above four. An indisputable fact is that among the more than 60 independent brands, only 10 have cumulative sales exceeding 100,000 vehicles in the first seven months, including Weichai Enzhi, Dongfeng Fengdu, Lazijie, Bisu, FAW Senya, Karry, etc. The cumulative sales of domestic independent brands are less than 10,000 units. For the automobile industry, which relies on scale for profitability, annual sales of 100,000 vehicles is the break-even line generally recognized by the industry. With the transformation and upgrading of the automobile industry, the market logic of the strong Hengqiang will become more clear, and the living environment of marginal car companies will only get worse and worse. Cao He, secretary-general of the All-China Federation of Industry and Commerce Automobile Chamber of Commerce, told Times Finance, "As the industry is eliminated and upgraded, the fate of marginal car companies is probably reorganization. It would be best if someone takes over. If not, they will only go bankrupt. Looking back at the end of next year , there will be more than the four recently named by the media." In fact, some companies are already on the road to restructuring. Not long before the National Day, the joint venture between FAW Xiali and Bojun Automobile, a new car-making force, had just been announced. FAW Xiali invested 505 million yuan in exchange for vehicle-related assets and liabilities such as land, factories, equipment, etc., only in exchange for the new joint venture's 19.9% ​​equity. Coincidentally, on August 16, Jiangling Group, Changan Automobile, and AIWAYS Automobile held the "JMC, Changan Automobile, and AIWAYS Joint Venture Release Ceremony" to announce the establishment of the mixed-ownership reform of Jiangling Holdings. According to the agreement, AIWAYS will invest 1 billion yuan in the registered capital of Jiangling Holdings. After the capital injection is completed, AIWAYS, Jiangling, and Changan will reorganize Jiangling Holding Group with a share ratio of 50%:25%:25% respectively. Looking for a successor to reorganize has become the last struggle of fringe car companies. Although rumors of the bankruptcy of four car companies have been clarified, and no car company has actually gone bankrupt so far, the tide of the times will come to an end, and after the era of brutal expansion of cars comes to an end, the naked swimmers will eventually be eliminated.