Recently, Nezha Auto has been plagued by negative news - 70% layoffs, suppliers chasing debts, factory shutdowns, store closures, and financial difficulties.

Nezha Auto's factory in Tongxiang, Zhejiang Province has been suspended for nearly a month. Media reporters visited and found that the factory's three major workshops, including painting, welding, and assembly workshops, have all been shut down. The finished cars parked at the factory gate were covered with dust, indicating that they had been parked for a long time. There were few people inside the factory, and only a small number of vehicles were parked in the worker's electric bike parking area. Employees responded during the visit that some production line workers had been laid off, and the remaining workers were only waiting for N+1 compensation.

Photographed by IT Times reporters at Nezha Auto's production factory in Tongxiang, Zhejiang

Multiple Nezha Auto sales stores are facing severe operational difficulties. The store located in Hongqiao Tiandi, Shanghai, has already closed, and the experience center in the city center has had few customers in half a day. Additionally, four stores in Beijing have closed, two experience centers in Chengdu have closed, and some directly-operated stores in Hangzhou, Nanjing, and other places have also closed.

It is difficult not to conclude that the accounts receivable of upstream and downstream enterprises are likely to be unoptimistic when employee salaries cannot even be guaranteed. A-share listed company and Nezha Auto supplier Effort recently issued an announcement stating that it had filed a lawsuit against Hezhong Automobile, the parent company of Nezha Auto, for defaulting on over 48 million yuan in contract payments.

Nezha Auto has been slow to release its monthly sales data, but according to data released by the Passenger Car Association, Nezha Auto's domestic retail sales in October were 6,002 units, a year-on-year decline of 40.32%.

Despite Nezha Auto repeatedly "debunking rumors of layoffs and shutdowns" and claiming to be responding through business adjustments and organizational optimization, internal communication is inadequate, salary reduction plans are not transparent, and there have even been "unfair terms," causing employees to be very concerned about the company's future.