Lifan car owes salary and debt

Recently, when visiting the production base of Lifan automobile in Beibei District, Chongqing, the reporter found that the factory has been in a semi shutdown state since this year, and has defaulted on the employees’ wages for nearly two months. The reporter inquired the mobile phone map and found that Lifan auto sales outlets in Hangzhou, Shanghai and other cities have been basically closed. Many dealers of Lifan automobile said that they were often in arrears with their funds, but they were far away from picking up the car.
The shutdown or semi shutdown of automobile factories and the shutdown of most sales networks indicate that Lifan shares are in deep trouble. On the evening of October 25, Lifan issued the third quarter report, showing a net loss of 2.633 billion yuan, while according to its report in the first half of the year, its total liabilities reached 31.2 billion yuan. Why does Lifan stock go to the stage of huge loss? Does it have the opportunity to turn the situation around?
According to the 2019 half year report of Lifan Co., Ltd., the operating revenue is 5.17 billion yuan, and the operating cost is 4.89 billion yuan. Although the operating gross profit is 280 million yuan, the total sales expenses, financial expenses and management expenses are 1.22 billion yuan, resulting in a loss of more than 900 million yuan. Due to the weak development of automobile business, Lifan has tried to improve its profitability by means of investment, but the effect is not ideal. Lifan Tangyue real estate project invested by Lifan Co., Ltd. in Chongqing, except for a high-rise apartment and a small number of villas, the rest of the real estate has been shut down.
Lifan Co., Ltd., as the first private enterprise approved for automobile production qualification, once had two automobile production licenses of Lifan automobile and Lifan passenger vehicle. Its main business is divided into automobile and motorcycle production and sales, and the total revenue of the two businesses accounts for more than 90% of the company’s revenue. Twenty seven years ago, Lifan shares developed rapidly because of its involvement in the motorcycle industry. And Lifan staff also revealed that the company has focused on returning to the motorcycle business. Industry insiders said that affected by the downturn in the auto industry, auto companies are also facing a shuffle, the survival of the fittest is imperative.