Great Wall Motors denies report of major layoff

Domestic carmaker Great Wall Motors Co denied reports that it will launch a major layoff within the year, Beijing-based newspaper China Business Journal reported Saturday.

Earlier media reports said that the company will lay off some 20,000 workers within the year, which is around one-third of its current workforce.

Though the company denied it planned to make any layoffs, the China Business Journal cited a source close to the matter who said that the company may still cut around 2,000 people this year in its sedan department.

Great Wall Motors' sales have been falling since the beginning of this year. In May, it sold 52,000 units of cars, down 15.7 percent year-on-year and sedan sales totaled 4,643 units, down 73.51 percent year-on-year.

In the first five months its sales also dropped 3.87 percent on a yearly basis to 298,871 units.

Great Wall Motors is in a transition stage before it could introduce more new models and the sales may rebound in the future, the report said, citing Xu Yingbo, an analyst at CITIC Securities.

Great Wall Motors is gaining recognition among Chinese consumers very fast. In 2013, the company's H6 SUV model reported the highest sales figures of 217,889 among all SUV models, including those produced by joint-venture carmakers.

The company is also shifting its focus to SUVs boosted by its strong performance and China's fast-growing SUV market. During the 2013 Guangzhou auto show, the company launched its brand new H8 model.

Priced between 201,600 yuan ($32,276) to 237,000 yuan, the model is being seen as the company's latest effort to tap into the nation's middle and high-end markets.

But delivery of the model has bumped into difficulties. In January, the company first delayed deliveries of the model due to technical problems such as engine noises.

On May 8, Great Wall Motors again announced another delay to the delivery, due to noises in the drive system, and said that it will further improve the model until it reaches top-notch quality.

It is still not clear when the company will make the deliveries. Calls to the company's media officer went unanswered on Sunday.

The company has set a target to sell 890,000 units, up 18 percent compared with its sales in 2013. But analysts said it will be hard for the company to meet the target given its weak performance in the first five months of this year.