Beijng (ZXZC)- Borgward will file for bankruptcy, which will be announced at the beginning of July, Sina Tech reported today, citing several sources who are familiar with the matter. 

Borgward BX5; photo credit: Borgward 

In 2014, BAIC Foton acquired the iconic German brand and in March, 2019, Ucar, a chauffeured car service provider in China, bought 67% stake of the company with 4.109 billion yuan.

Many former employees of Borgward revealed that in order to help Borgward enter into high-end vehicle market, Foton has been marketing Borgward as a brand with German origin, but its heavy investment seems to be a failure. Foton focuses on commercial vehicle market, and it turns out to be difficult for Borgward to grow under Foton.

Data from the China Passenger Car Association showed that monthly sales of the auto brand were 430 vehicles, down 40.3% from a year ago. The cumulative sales in the first five months of this year slumped 41.3% year on year to 2,627 vehicles.  

In 2019, the brand’s annual sales totaled 54,500 vehicles, but in 2020, affected by the Luckin Coffee fraud, its annual sales plunged to 8,740 vehicles.