(Yicai) Dec. 18 -- A subsidiary of Chinese automaker FAW Group is in financial trouble and has suspended production and delayed salary payments for several months, according to insiders.

FAW Jilin halted vehicle output around June, an internal source told Yicai, while staff said the unit has not paid salaries since August. They are calling on the leadership of Changchun-based FAW Group to hold talks with them and come up with a solution.

FAW Jilin’s product development and new energy transition have failed to keep pace with the market, resulting in serious operating difficulties, sources close to the unit said.

FAW Jilin was founded in 1980 and became a subsidiary of FAW in 1990. It mainly produces passenger cars, commercial vehicles, and special-purpose vehicles. Sales of its main passenger car brand Xenia have been declining due to stiffer competition in the market for sports utility vehicles.

Between 2016 and 2018, FAW Jilin accumulated losses of nearly CNY3 billion (USD411.8 million). As a result, it launched a mixed-ownership reform in 2018, with Shandong Baoya New Energy Vehicle investing CNY1.5 billion for a 70.5 percent stake. FAW’s holding fell to 29.5 percent.

FAW Jilin sells a variety of car models, including gasoline-powered, electric, and hybrid ones. It has not publicly released any sales data in the past few years.

Editor: Futura Costaglione