Major shareholders of Chery Automobile Company plan to raise CNY20bn (US$3.12bn) by selling a controlling stake in the struggling Chinese automaker, according to local reports.

The carmaker was established in 1997 and quickly became one of the most popular brands in China. In 2007 it was the first Chinese brand to achieve sales of over 1m vehicles.

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But the Anhui-based company has struggled to keep up with the domestic vehicle market and has fallen way short of its own internal growth targets. Last year it sold just 680,000 vehicles, down 3.5% on the previous year, while the overall Chinese market expanded 3% to 28.8m units.

Net profits dropped by over 22% to CNY264m in 2017 while debt rose over 7% to CNY61.2bn.

The company's largest shareholder, government-controlled Wuhu Construction Investment, said it would retain veto powers to ensure the company did not move operations outside the province.

Other major shareholders in the automaker include Wuhu Ruichuang Investment, owned by the company's chairman Yin Tongyue, and Huatai Securities.

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Local reports suggest representatives of the company's workers also approved the sale at a recent meeting in return for a commitment to raise wages and the prospect of fresh capital to help revive the carmaker's fortunes.

A deal is understood to be imminent, with a preliminary agreement expected to be signed by the end of June, but there was no news of the identity of the buyer despite a number of companies having shown keen interest.

The sale will bring in much needed investment capital at a time of huge change in the domestic automobile industry, with its rapid move towards new energy vehicles, as well as likely management changes to help the company refocus.

Learn more about Chery from just-auto's QUBE