China’s UCAR Buys Majority Stake in Germany’s Borgward

March 27, 2019 at 4:50 PM

China-based ride-hailing and short-term car rental service UCAR Inc. is acquiring a 67% controlling stake in Borgward Group AG, a German SUV maker, for 4.1 billion yuan ($610 million).

UCAR is buying the holding from Changshen Xingye Enterprise Management Advisory, which acquired it three months ago from Beijing-based truckmaker Beiqi Foton Motor Co., Automotive News China reports.

One of Germany’s largest vehicle producers in the 1950s, Borgward was declared bankrupt in 1961. The company was revived in Stuttgart in 2008 as the Borgward Group AG. Backed by Foton, it began making two Borgward SUV models—the BX5 and BX6—in China four years ago.

Last September the company opened a U.S. headquarters and tech center in California and declared ambitious plans to start sales in the American market in 2021.

But the money-losing brand has struggled with high costs and insufficient sales. Last year, Borgward lost more than 4.3 billion yuan ($639 million) in less than two years, according to ANC.