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China's first private passenger car manufacturer listed on the A-share market has been selected as one of the top 500 Chinese enterprises for many years in a row, and has been in the forefront of the automobile and motorcycle industry in Chongqing for many years. This is the introduction made by Lifan Industrial (Group) Co., Ltd. on its official website. However, it is such an once-glamorous car company that has been protected by dealers again recently.

According to media reports, a number of Lifan car dealers have gathered at Lifan vehicle Research Institute to claim compensation from manufacturers to protect their rights. Some dealers said that they asked Lifan to withdraw the net in May 2019, but the deposit of 150000 yuan and the balance of more than 4000 yuan of the car could not be recovered so far, and no one from the manufacturer came forward to communicate with him, so they had no choice but to make a claim through safeguarding their rights. The situation of other dealers is basically similar, with rebates, deposits and loans ranging from hundreds of thousands to hundreds of thousands.

This is not the first time Lifan has encountered the protection of rights. In May 2019, more than 30 Lifan dealers defended their rights in front of Lifan headquarters in Chongqing. It is hoped that Lifan Motor can solve its demands. In a letter from the dealer to Chongqing Lifan Automobile sales Co., Ltd., the dealer detailed the main reasons for safeguarding its rights, including: low product quality, high repair rates of Maiwei, Xuanlang model engines, gearboxes and circuits; delaying store acceptance and delaying payment and compensation for building stores under various excuses; infringing upon the rights and interests of dealers. At the same time, the letter shows that the above rights protection dealers hope to be able to withdraw from the network after receiving the corresponding compensation.

A year has passed, not only has the problem not been effectively solved, but the operating condition of Lifan Motor has continued to deteriorate.

On the evening of June 18, Lifan shares issued an announcement disclosing the company's cumulative supplementary announcement involving litigation (arbitration) matters. The announcement shows that the company has been involved in 392 lawsuits (arbitration), involving a total amount of 2.906 billion yuan. Of the 392 cases, 221 have been adjudicated (arbitration). Lifan is all defendants and needs to compensate the other party a total of 1.836 billion yuan. There were 82 unheard cases, involving a total amount of 580 million yuan. In addition, the amount of undisclosed litigation (arbitration) reached 268 million yuan in the past 12 months. There are also 181 lawsuits (arbitration), the total amount of which is 164 million yuan due to the small amount of individual cases.

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

The sharp decline in Lifan's performance has a lot to do with the current sluggish sales. From January to May 2020, Lifan's sales of traditional passenger cars fell by 95.5% to 887, while sales of new energy vehicles fell by 54.5% to 460. Lifan has said in the announcement that Lifan car business has been stagnant, the domestic market is basically lost, there are only a small number of export orders, passenger car brands are at risk of being marginalized.

The current market competition pressure is huge, these uncompetitive enterprises will naturally be washed and edge. For example, Huatai Automobile, Youth Lotus, which has declared bankruptcy, and BAIC Yinxiang, which has stopped production since last year but is still facing dealers' rights protection …...

2018 is the first decline in the car market in 28 years. Judging from the data in the first quarter of this year, the differentiation and cleaning of the market are still intensifying. According to the industry, the Chinese market will become more and more competitive in the future. With the reshuffle of the car market, more car brands may withdraw from the market in the future.

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