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Domestic car companies opened the prelude to reshuffle, loss-making operation has become the norm. On October 25, Lifan released its third-quarter results report in 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. Lifan shares lost 947 million yuan in the first half of this year, meaning that Lifan lost 1.686 billion yuan in the third quarter alone.

Behind the operating loss is a sharp decline in Lifan's business. According to Lifan's September 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.

Not long ago, Ping an Bank's internal risk investigation notice was exposed, Lifan was named, causing an uproar. Lifan immediately issued a clarification notice, revealing that there was no bankruptcy plan for the formula so far.

At the same time, Lifan also responded to the problems of performance and debt. Lifan said that at present, the company has high debt and great pressure on capital liquidity. According to the overall situation of China's automobile industry, the future development may face challenges. The company will also actively take a variety of measures to reduce risks.

It is understood that Lifan recently encountered a large number of lawsuits, many auto parts suppliers, financial companies sued Lifan for huge sums of money. The cumulative amount of litigation (arbitration) involved in Lifan shares has reached 1.423 billion yuan in the past 12 months, according to an announcement issued by Lifan shares on July 26. litigation cases mainly include financial loan contracts, factoring contracts, financial leasing contracts and other disputes. Wanan Technology, a parts supplier to Lifan, issued a notice on July 30, suing Lifan shares to demand payment of about 6.0757 million yuan from its subsidiaries Chongqing Lifan passenger car Co., Ltd. And Lifan Automobile Beibei Branch.

In addition to debts, Lifan shares also used the raised funds a total of 449 million yuan three times in July 2018, December 2018 and April 2019 to temporarily replenish the working capital, all of which have not yet been repaid. The first sum of 379 million yuan is due on July 5, 2019. Lifan said that the company's current capital liquidity is tight, production and operation also need a certain amount of liquidity, unable to raise large amounts of funds in a short period of time. In addition, it is difficult for the company to raise new financing, so the company is unable to return the above 379 million yuan to raise funds in the short term.

Recently, it has been reported that the Chongqing municipal government summoned creditors from local financial offices and relevant banking institutions to help Lifan set up a debt committee, requiring banks to "do not draw loans, do not suppress loans, and keep lending." This gives Lifan a chance.

Lifan responded that the Chongqing municipal government has indeed set up a debt committee for Lifan Motor and is actively resolving the debt crisis, and companies are also actively repaying non-bank debts (previous defaults such as trusts).

Lifan Group started as a motorcycle in 1992, was founded by founder Yin Mingshan at the age of 53, entered the passenger car industry in 2006, and eventually used 200000 yuan of capital to build Lifan into an industrial group with revenue of more than 10 billion yuan. Business includes scientific research and development, automobile, motorcycle and engine production and sales.

However, in many years of development, Lifan has not been able to get rid of the backward situation at the low end, which is also one of the reasons for its marginalization in the deterioration of the industry environment in the automobile market, and the phenomenon of survival of the fittest in the market is intensified. Lifan car is in deep trouble, whether it can tide over the difficulties is also a great uncertainty, I am afraid it is difficult to avoid the fate of reshuffle.

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