(Yicai Global) March 2 -- Uxin, which runs one of China's largest online second-hand car platforms, is suspending operations to wait out the novel coronavirus epidemic, online news portal The Paper reported today, citing an internal company circular.
Staff were asked to stop working from yesterday, the Beijing-based company said. During the shutdown employees will received a minimum living wage as dictated by regional guidelines. Normal operations will resume when the situation improves, it added.
Uxin's announcement follows a Feb. 29 statement from the firm saying it would slash wages by as much as 40 percent. It was once one of China's most successful business-to-business and business-to-consumer used-car platforms. At the end of 2018, it had 12,619 employees.
China's online used-car sector has been badly hit by the Covid-19 virus outbreak. Dealers are resorting to drastic measures to hold out against crashing sales. Beijing Souche Network Technology, which runs Souche, has slashed its workforce by 70 percent and Jinguazi Technology Development, operator of Guazi, has laid off 30 percent of its staff, according to reports.
Whether they can hold out until the epidemic abates remains unknown, an industry analyst said.
Uxin's business actually started to take a turn for the worse last April when it was accused by Hong Kong-based short seller J Capital Research of exaggerating its vehicle trading volume by up to 40 percent and of having hidden debt. The firm's Nasdaq-listed stock dived, five executives left and Uxin was forced to lay off a large number of workers. It also began to run into financing difficulties.
Uxin lost CNY1 billion (USD143.2 million) in the first nine months of last year, a 1.4 percent drop year on year. At the end of trading in New York last week, the company's share price [NASDAQ:UXIN] closed down 4.6 percent at USD1.67.
Editor: Kim Taylor