AutoBeta(AutoBeta.net)06/18 Report--

There seems to be little time left for Lifan cars. Lifan cars with weak sales and heavy debts are experiencing survival difficulties.

On the evening of June 18, Lifan issued an announcement disclosing the supplementary announcement of the Company's accumulated litigation (arbitration) matters. The announcement shows that the company has been involved in 392 lawsuits (arbitration) involving 2.906 billion yuan. Of the 392 cases, 221 have been adjudicated (arbitrated), all of which are defendants of Lifan, with a total compensation of 1.836 billion yuan. There were 82 unheard cases involving a total amount of 580 million yuan. In addition, undisclosed litigation (arbitration) in the past 12 months reached 268 million yuan. There were also 181 lawsuits (arbitrations), which were not disclosed due to the small amount of individual cases, with a total amount of 164 million yuan.

Compared with Lifan's performance report, the nearly 3 billion yuan debt almost crushed Lifan. According to the performance report, Lifan realized revenue of 7.4 billion yuan in 2019, down 32.35% year-on-year; net profit loss attributable to shareholders of listed companies was 4.68 billion yuan, down 1950.83% year-on-year; revenue in the first quarter of 2020 was 560 million yuan, down 74.88% year-on-year; net profit loss attributable to shareholders of listed companies was 197 million yuan, down 103.06% year-on-year.

In fact, Lifan Automobile's presence in the market is not strong, but due to poor management, it is at the forefront of public opinion. In May 2019, many dealers went to Chongqing Lifan Automobile Headquarters to protect their rights. The reason for safeguarding rights was Lifan Automobile's behavior of selling cars to non-dealers at low prices; in October 2019, media reported that four automobile enterprises including Lifan Automobile would enter bankruptcy proceedings at the end of the year. Lifan Automobile issued a clarification announcement saying that the report was false, but the company did have high debts and great pressure on capital liquidity; In November 2019, CCTV reporters visited the production base where Lifan Automobile is located and found that Lifan Automobile production line was in a semi-shutdown state, and at the same time, there was salary arrears for employees.

Dealers, suppliers and even subsidiaries have sued Lifan Automobile in court. Lifan faces unprecedented operating pressure against the background of China's overall automobile market downturn. Data show that sales of Lifan traditional passenger cars fell 75.52% to 22536 vehicles in 2019, while sales of new energy vehicles fell 69.49% to 3091 vehicles. In the first five months of 2020, Lifan's sales of traditional passenger cars fell 95.49% to 887 vehicles, and sales of new energy vehicles fell 54.50% to 460 vehicles. The combined sales volume of the two types of vehicles was less than 1500 vehicles.

According to the data, Lifan brand was founded in 1992, acquired Chongqing Special Purpose Vehicle Manufacturing Factory in 2003, founded Lifan Automobile, and officially obtained the autonomy of automobile manufacturing, production and sales in December 2005. Up to now, Lifan Automobile has been developing in the automobile industry for 14 years, but it has not formed its own advantages in technology, product strength and service. In the epidemic, Lifan faltered in the market, car sales were extremely low, and it could be said that the car business was almost abandoned. Under the background of the recovery of sales volume of many automobile enterprises, if there is no strategy to improve the development of automobile business, Lifan Automobile may not escape the fate of being eliminated by the market.

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