Jiyue has disbanded on the spot days after rumors of the company being in trouble first started circulating. On paper with the company being a joint venture between Geely and Baidu, both huge companies, it is one brand that shouldnβt fail. The shockwave going into 2025 will be if Jiyue can fail, who will be next?
Originally known as Jidu Auto, the company started life as a joint venture between Baidu with a 55% share and Geely 45%. Largely due to the companyβs inability to get relevant production licenses for the car, the company restructured into Jiyue Auto, where the majority of ownership (65%) came under Geely and 35% under Baidu.
The first product, the Jiyue 01, went on sale in 2023. An SUV, it never sold well, and the companyβs second model 07, a sedan, launched in September this year. This helped lift sales, which had previously been in the hundreds to the low thousands per month. However, cumulative sales for this year up to the end of November have only been 13,834 units.
By December 10, rumors on Weibo said Jiyue was about to disband. Employees believed that it would just be a layoff, and they were informed that the company would hold a meeting the next day.
Jiyue CEO Xia Yiping Β said at the meeting on the afternoon of December 11 in the form of a video address βJiyue is encountering difficulties, and it is necessary to reduce the merger of duplicate departments, improve efficiency, and cut projects that cannot make money in the short term.β
By December 12, the company was disbanded on the spot, and Xia was besieged by angry employees discussing the law after he admitted that the N + 1 compensation for the resignation plan is uncertain and that the social security payments cannot be paid. Employees responded by carrying off the companyβs office equipment.
Already, there are rumors of financial impropriety. Jiyueβs CFO, Liu Jining, is missing together with the companyβs books. It seems that his family is also missing with him, and based on electronic communications, his IP address has been traced to Singapore.
Caixin reports that Baidu sent a financial team to investigate Jiyue in October 2024 for due diligence before it invested a further three billion yuan (412 million USD). Reportedly they discovered a financial hole of up to seven billion yuan (962 million USD) that was unaccounted for and so chose not to invest.
There are also rumors surrounding the CEO, Xia Yiping, claiming that he significantly overpaid various suppliers.
The companyβs headquarters are being besieged by supplies who have not been paid. These appear to be mainly in the area of media companies who were contracted for various social media exposure, rather than part suppliers.
Around 70% of the parts of Jiyue cars are purchased from Geely. In February of this year, it was reported that Jiyue owed nearly 1.5 billion yuan (206 million USD) to Geely for parts and OEM fees. Furthermore, according to one employee, Geely stopped producing cars for Jiyue in November.
In a surprising reappearance, Yang Yueqing, project engineering director of HiPhi made a video a few days ago essentially advising affected parties to run for the hills. A decidedly disheveled-looking Yang advised employees to leave as soon as possible. He claimed that the longer they wait, the more competition they will have in getting new positions.
Furthermore, Yang advised owners of Jiyue cars to sell them as quickly as possible. More advice came to car owners from Jiyue car blogger Jia Gong. He said that without network support, the intelligent driving system would only be able to do lane-keeping. He also suggested that car owners use the NFC and UWB key functions as soon as possible because if the network is cut in the future, the mobile phone Bluetooth app will not be able to unlock the vehicle and open the doors.
The big question going into 2025 is who will be next?
Sources: Fast Technology, 163.com, Fast Technology
