Chinese vehicle manufacturer Lifan Industry (Group) Co Ltd has announced it is seeking new investors in the company after the Chongqing municipal authorities accepted its application for bankruptcy reorganization.

The company was founded in 1992 and was the first Chongqing-based auto manufacturer to be listed on China’s A-share market. But its products have fallen behind those of its competitors over the years in terms of competitiveness and its financial performance deteriorated as a result.

The company has sold less than 250 vehicles so far this year, according to industry sources, down from 13,200 in 2019 and a peak of 158,000 units in 2012.

Lifan has an annual production capacity of 150,000 vehicles, 300,000 automotive engines, one million motorcycles and one million general gasoline engines, according to the company’s announcement.

The company’s announcement specified that any investor would need to have a minimum of CNY20bn (US$2.9bn) in assets. It confirmed that fresh capital would be used to optimise its asset, debt and equity structures, safeguard the legitimate interests of creditors and integrate upstream industrial resources to improve their performance and make upgrades were needed.