Chery Automobile Co, headquartered in Anhui, lost 191 million yuan ($31 million) in the first quarter and is planning on slashing jobs to cut costs, China Business News reported on Monday.
Chery has been reeling with problems, including excessively long production lines, constantly changing its managers, and heavy losses. Its various sub-brands have been disputing each other for market share, causing brand confusion.
As a result, in April this year, the company decided to suspend some of its sub-brands including Ruilin, Rely and Karry. But the debt ratio remained high according to the company's first quarter financial report.
An inside source, who requested anonymity, told CBN that Chery was planning to slash jobs to cut costs, but the size of the layoff was not clear.
It is believed that the company will do away with 9,000 jobs, but the number might be exaggerated, according to the insider.
Operating profits have suffered a 191 million yuan loss compared with 234 million yuan in the first quarter of 2012.
Meanwhile, Chery's funded liability keeps rising from 2.9 million yuan in the first quarter of 2012 to 3.7 million yuan for the same period in 2013. Its total debt is 50.3 million yuan, and the debt ratio has risen from 73.58 percent in first quarter 2012 to 74.22 percent a year later.
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