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With the continuous recession of the automobile industry, the loss-making operation of domestic automobile companies has become the norm, and some joint ventures and independent brands have difficulties in survival, which leads to a reshuffle. Chongqing is one of the "China Automobile cities", which gathers many independent and joint venture brands and auto parts supporting industries, but the decline in sales and brand decline has led to a severe setback to the automobile industry. Today, CCTV Finance reported the operation status of Lifan Automobile, one of the representative automobile companies in Chongqing automobile manufacturing industry. The investigation found that Lifan Automobile production base was almost at a standstill, and employees were still in arrears. The financial report shows that Lifan shares lost 2.6 billion in the first three quarters. Lifan is only the epitome of Chongqing and even China's automobile industry.

The investigation found that Lifan has two automobile production bases in Chongqing, and the Lifan automobile production base in Liangjiang New area has completely stopped production. The base was sold to Chongqing Liangjiang New area Land Reserve renovation Center in December last year for a purchase price of 3.315 billion yuan. At another passenger car production base in Beipei District (the third factory), many workers said that they had been in semi-shutdown since the beginning of this year and had owed employees nearly two months' wages. One worker said, "if we don't produce cars, we won't produce cars any more, and the factory has collapsed."

On October 25, Lifan released its results for the third quarter of 2019. In the first three quarters, the company achieved an operating income of 6.686 billion yuan and a loss of 2.633 billion yuan, with a total debt of 17.863 billion yuan. According to the production and sales report, the company sold 22000 traditional passenger cars from January to September, down 72.25% from a year earlier, while sales of new energy vehicles totaled 2035 in the previous September, down 65.67% from a year earlier. The rest includes the motorcycle and gasoline engine business, while Lifan has declined to varying degrees.

Although the situation is difficult, Lifan shares have not entered the bankruptcy restructuring process, and the Chongqing municipal government, in conjunction with various banks, has set up a Lifan debt committee, requiring banks to "do not draw loans, do not hold down loans, and keep lending" to help Lifan shares ease the financial pressure. Lifan said earlier that at present, the company has high debt and capital liquidity pressure. According to the overall situation of China's automobile industry, the future development may face challenges, and the company will actively take a variety of measures to reduce risks.

Lifan Group started as a motorcycle in 1992, was founded by founder Yin Mingshan at the age of 53, and entered the automobile manufacturing industry in 2006. Lifan shares related staff revealed that the company will focus on returning to the motorcycle business.

In fact, Chongqing's automobile manufacturing industry was very unstable in 2019. Changan Automobile, Chongqing's largest automobile enterprise, fell into a loss. At that time, Changan Ford, Chongqing's largest joint venture brand, now its sales have also fallen into losses, and Changan Suzuki has almost been abandoned. Others, including BAIC Yinxiang, Speed Automobile, Chongqing Zhongtai, brilliance Xinyuan Siwei Automobile, Weichai Yingzhi Automobile, and so on, have successively experienced a decline in sales, and even some enterprises have encountered difficulties in operation. This situation also leads to a heavy setback in the upstream and downstream supplier industry chain.

The cumulative revenue of Changan Automobile in the first three quarters of 2019 was 45.115 billion yuan, down 9.5 percent from the same period last year, while the net profit attributed to shareholders of listed companies was-2.66 billion yuan, 328.83 percent less than the same period last year. In terms of sales in the first three quarters, Chongqing Changan sold 448350 vehicles, down 17% from the same period last year, while Changan Ford sold 128906 vehicles, down 58% from the same period last year.

Chongqing Yinxiang Industrial Group's Speed Automobile, as well as BAIC Yinxiang, which is a shareholder, have encountered operational difficulties. BAIC Yinxiang has been in crisis since July last year when a notice of suspension of production began, during which it also encountered incidents such as employee wage demands, dealers and suppliers' door-to-door protection of rights. On August 30 this year, the Chongqing Municipal Government and BAIC signed an agreement to promote BAIC Yinxiang's strategic restructuring. BAIC Yinxiang only ushered in a glimmer of life.

For the current dismal situation in the auto industry, the government has extended a helping hand to the car companies that are in trouble. In August this year, in Liangjiang New area of Chongqing, where the automobile industry gathered, the government provided subsidies to enterprises in difficulties. In the first batch of stable job return list of enterprises in difficulties, more than 30 automobile and auto parts companies, including Changan Ford Motor Co., Ltd., SAIC Iveco Hongyan, Yanfeng Andotuo, Yanfeng auto accessories, and so on, became difficult enterprises, of which Changan Ford received a subsidy of 140 million. The move can stave off massive layoffs in struggling companies, thereby stabilizing jobs.

No matter from Lifan, Changan, or the entire Chongqing automobile manufacturing industry, it all reflects the continuing depressed mood in the automobile industry. According to the list of car companies' sales statistics in September, 70% of car companies' sales fell, and nearly 30% of them fell by more than 50%. At the same time, only 11 of the autonomous car companies have increased their sales, while the remaining nearly 80% are in an uphill battle, and the decline in sales has directly led to reduced profits and losses.

The automobile industry is facing a reshuffle, survival of the fittest is imperative, many enterprises and supporting industries suffer, layoffs and factory closures are inevitable.

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