Borgward, the German car brand revived by Beiqi Foton Motor, a truck subsidiary of the China state-owned automaker BAIC Group, was declared bankrupt by a court in Beijing this week.
The ruling was issued by the First Intermediate People's Court of Beijing, Foton said on Wednesday.
Insolvent Borgward is also seeking court approval to liquidate its assets, Foton said.
Borgward, once Germany's third-largest automaker, was liquidated in 1961. In 2014, Foton purchased the rights to the Borgward brand to expand into China’s passenger vehicle market.
From 2015 to 2019, Borgward rolled out four gasoline-powered crossovers, the BX3, BX5, BX6 and BX7, as well as a battery version of the BX7, in China. The vehicles were produced at a renovated Foton factory in suburban Beijing.
However, the brand failed to achieve meaningful sales and scale.
After reaching a peak of around 55,000 vehicles in 2019, Borgward’s annual deliveries shrank to some 3,600 vehicles in 2021.
Due to limited sales, Borgward racked up losses of more than 4 billion yuan ($564 million) from 2016 to 2018.
In 2021 alone, the brand incurred a loss of 4.7 billion yuan, according to Foton’s filings on the Shanghai Stock Exchange, where the company is listed.
Borgward started selling the BX7, which is about the size of an Audi Q5, in Europe in 2018 and said it planned to open a factory in Bremen, Germany in 2019 to build 10,000 cars a year. However, the plant was never opened.