Chinese automaker Foton Motor has sold a majority stake in German luxury carmaker Borgward Group, according to local reports citing a company filing to the Shanghai Stock Exchange at the end of December.

Borgward ceased operations in the 1960s under somewhat controversial circumstances but the brand was relaunched by Christian Borgward, the grandson of the original founder, in 2005.

Foton acquired 100% of Borgward’s shares in 2015 and subsequently lent the company US$621m mainly to expand into China.

It currently has a plant in Beijing with production capacity of 100,000 vehicles per year and is estimated to have sold 34,000 SUVs in the country in 2018.

According to Foton’s filing, Borgward had assets worth CNY11.81bn (US$1.74bn) and debts of US$971m at the end of August 2018.

The reports claimed Changsheng Xingye Enterprise Management Consulting, a company based in Xiamen in Fujian province, acquired a 67% stake in Borgward from Foton for CNY3.97bn (US$578m) and also agreed to repay Foton’s loans within three years.

Chinese car retailer and ride sharing company Ucar is understood to be the guarantor of the deal between Changsheng and Foton, in return for lower car purchase costs and other collaboration with the carmaker in areas such as sales and fleet management.

Ucar is China’s largest fleet operator with around 400,000 vehicles in use and 80m ride sharing users across the country. It is also a major car retailer, which should help strengthen Borgward’s sales in the country.

Changsheng is said to have agreed to continue Borgward’s business plan launched last May, involving the introduction of at least two new models per year and to begin sedan production within three years.