One of China’s original car makers has declared bankruptcy after 50 years of operations, having failed to adapt to changes wrought by the market economy, local media reported on Wednesday.
The Beijing No. 2 Automotive Manufacturing Factory, which was founded in 1955, applied to a city intermediate court on Tuesday for bankruptcy, Kyodo News quoted the Beijing Times as saying, citing court sources.
The company’s 140m yuan (US$16.5 million) in debts had exceeded its 85m yuan in assets, the report said. Problems with the quality of its management and marketability of its products also led to its demise, it said.
Kyodo News said Beijing No. 2 Automotive stopped producing cars three years ago and filed for bankruptcy to protect its workers and creditors.
The company made 130 types of vehicles and was China’s earliest manufacturer of light vehicles, according to Beijing press reports.
Local media reported that it also had a tie-up with Isuzu Motors , but an Isuzu China spokesman said he had never heard of such a venture.
”It made an important contribution to the development of the automotive industry,” the Beijing Times said.
”But along with the establishment of a market economy, because it could not adjust its product structure and operational mechanisms, the No. 2 Automotive factory little by little got trapped in difficulties,” the paper said.