(Yicai) Oct. 31 -- Yuanhang Auto has confirmed to Yicai that it is carrying out strategic adjustments, after sources claimed the electric vehicle brand under Chinese automotive giant Dayun Group is in financial trouble.

Yuanhang is undergoing a restructuring, but executives and mid-level employees are still at their posts, a spokesperson told Yicai, adding that operations will fully return to normal after the adjustments are completed.

Yicai learned from insiders that Yuanhang is experiencing financial strains due to a highly competitive market. As a result, the company launched layoffs, delayed salary payments, and cut wages. It is now actively seeking assistance from local governments and new financing.

“There have been delays in salary payments since June,” a former sales consultant at a Yuanhang store told Yicai. “June’s salary was paid in late September.” Other salespersons also confirmed the wage arrears.

A Yuanhang store in Haikou, China’s southernmost Hainan province, closed this week because of poor performance, a former staffer told Yicai yesterday. Low brand recognition and insufficient marketing capabilities were the main reasons for weak sales, a consultant at another Yuanhang store explained to Yicai.

Yuanhang is a luxury EV brand with products on sale for CNY269,800 to CNY509,800 (USD37,900 to USD71,600). In September, it sold less than 800 cars, reaching a total of about 5,500 units in the first nine months of the year. It has not released a new model in two years.

Dayun Groups was established in 1987 as a motorcycle manufacturer. IT later expanded its business to passenger cars, medium and heavy-duty trucks, and new energy vehicles.

Editor: Tang Shihua, Futura Costaglione