The announcement stated that on April 22, 2022, the Beijing No. 1 Intermediate People’s Court ruled to accept BORGWARD Automobile’s bankruptcy liquidation application, and believed that according to the results of the confirmation of creditor’s rights and the assets of the debtor confirmed after evaluation, BORGWARD could not pay off due debts. Debt and assets are significantly smaller than liabilities, not enough to pay off all debts. So far, no reorganization or settlement applications have been filed. To sum up, BORGWARD has met the statutory conditions for declaring bankruptcy and declared Beijing BORGWARD Automobile Co., Ltd. bankrupt.
Borgward Automobile was established in Germany in 1919. It once launched classic models such as P100, Goliath GP700, Hansa2400, etc., with annual sales exceeding 1 million units, second only to Volkswagen and Opel at that time. In 1961, it declared bankruptcy due to unfavorable capital turnover.
In January 2014, FOTON Motor spent 5 million euros to acquire the Borgward brand, and in January 2016, Beijing Borgward Automobile Co., Ltd. was established. Since then, Borgward has launched its first SUV model, the BX7, officially launched in April 2016. After the launch of BX7, due to the publicity gimmick of the “German top four” vehicle, BX7 quickly received a large number of orders, maintaining a monthly sales level of 5,000 units for six months in a row. In 2016, BX7 achieved sales of nearly 40,000 units.
However, due to issues such as product quality control and after-sales service, word-of-mouth gradually collapsed, and Borgward’s second SUV model, the BX5, did not achieve good sales. Data show that from 2016 to 2018, Borgward Automobile sold a total of 106,900 vehicles in three years, with a cumulative loss of 4.014 billion yuan.
In 2019, UCAR completed the acquisition of Borgward Automobile. For a period of time after that, UCAR purchased a large number of Borgward models, but it was still unable to reverse the decline in the market, and the sales of Borgward Automobile fell off a cliff.
Finally, on April 8, 2022, Foton Motor submitted an application for bankruptcy liquidation to the Beijing No. 1 Intermediate People’s Court. According to Foton Motor’s announcement, Borgward Automobile’s net assets are negative 2.29 billion, and it is already insolvent.
