Lantian Group Denies Rumors of Collapse: Operations Stable, No Pay Cuts or Layoffs

Recently, an internal interdepartmental memo from Lantian Group has been circulating online, claiming that the group suffered significant losses in the second quarter, leading to management salaries being suspended in July and base-level employees receiving a 30% pay cut. This sparked rumors such as “Hunan’s largest auto dealership group defaults.” In response, Lantian Group issued a public letter on July 8 clarifying that these claims are false, emphasizing that the group’s overall operations remain stable and improving, with normal store operations, manufacturer partnerships, and customer service continuing as usual, and employee salaries being paid on time. Chairman Tang Guohua stated that the document in question originated from a misunderstanding and inaccurate wording by the HR department while summarizing verbal discussions from a monthly operational coordination meeting. He stressed that the document was never finalized into an official, legally binding document and was never implemented. Tang emphasized that the group faces no cash flow issues, remained profitable overall in the first half of the year, and experienced only a temporary loss in Q2, with operating performance roughly on par with the same period last year. Tang clarified that the claim about “investors being unable to sustain salary payments via loans amid ongoing losses” was a misinterpretation. The original intent was that the company insists on covering personnel costs through its own operational revenues rather than relying on loans—a statement not implying that most stores are continuously unprofitable. Currently, 80% of the group’s business comes from fuel-powered vehicles and 20% from new energy vehicles (NEVs). The group plans to increase NEV sales to 40% in the second half of this year and reach the industry average next year. Additionally, Tang explicitly stated that the group currently has no plans to implement a “rank-and-yank” (last-in-first-out) system. The company is still expanding its store network and faces staffing shortages. In the future, it will only close a small number of unprofitable outlets, with affected employees reassigned internally—no large-scale layoffs are planned. None of the group’s over 3,000 employees have resigned due to this incident, and all stores continue normal operations without any noticeable impact on daily business activity. Public records show that Lantian Group was founded in 1997, headquartered in Changsha, with operations spanning multiple cities in Hunan Province as well as Kaili in Guizhou, Pingxiang in Jiangxi, and Wuhan in Hubei. The group holds authorizations for 25 automotive brands and operates 88 branded 4S dealerships.