IM Motors Dealers Shut Down Across Multiple Regions, Leaving Customers Unable to Take Delivery; Manufacturer Steps In with Contingency Plan

Recently, authorized IM Motors dealerships in cities such as Kunming and Zhuhai have successively encountered operational disruptions. On July 7, the Guandu User Center operated by Kunming Zhihe Yuexing Automotive Sales & Service Co., Ltd. abruptly shut down—display vehicles and office equipment were removed, and staff collectively resigned. The company operated three IM Motors stores in Kunming. Just days before the closure, the store was still running promotional campaigns and inviting customers to visit, showing no signs of impending shutdown. Subsequently, on July 14, the Xiangzhou User Center in Zhuhai posted a notice announcing its temporary closure due to "dealer operational adjustments." Multiple car owners who had already paid for their vehicles or completed loan procedures reported being unable to take delivery after the store closed, and received neither proactive communication from the manufacturer nor updates on substantive progress. According to disclosures, over 190 car owners have been affected, falling into two main categories: those who paid in full but have not yet received their vehicles, and those who took delivery but cannot register their cars because the certificates of conformity were pledged by the dealer to financial institutions. Some owners stated that although the manufacturer registered their orders, subsequent communication has been inadequate, exacerbating anxiety amid uncertainty. Following the incident, IM Motors dispatched a dedicated task force to Kunming and announced remedial measures: for users who paid but did not receive certificates of conformity, the manufacturer will fully fund the redemption of these documents; for customers who placed orders but haven’t taken delivery, their original pricing and benefits will be honored, and deliveries will be coordinated through nearby stores. The company acknowledged that due to the large scale of funds involved and the need to coordinate with multiple institutions, resolution will take time, but it is working urgently to accelerate the process and address legitimate customer concerns. Employees of the implicated dealerships are also in distress, reporting several months of unpaid wages. The primary causes of the dealers’ cash flow collapse include high operating costs—annual rent for the three stores exceeds RMB 3.6 million, with monthly payroll around RMB 500,000. Sales revenue and manufacturer rebates were insufficient to cover expenses, ultimately trapping the business in a vicious cycle of using new customer payments to redeem certificates for earlier deliveries. This incident reflects the widespread pressures currently facing China’s auto dealership sector. According to data from the China Automobile Dealers Association, the dealer inventory warning index stood at 57.2% in June 2026—consistently above the 50% boom-bust threshold. Only 12% of dealers met their first-half sales targets, while 82% experienced price inversions (selling below cost), with more than half suffering inversions exceeding 15%. In 2025, nearly 5,000 nationwide 4S stores closed, merged, or transformed—a second consecutive year of decline. The industry’s profitability shrank to just 23.5%, while the loss-making share reached 55.7%. Since its inception, IM Motors has gradually shifted from a direct-sales model to an authorized dealership system. In the first half of this year, it delivered a total of 40,087 vehicles, a 58% year-over-year increase. However, rapid sales growth has exposed weaknesses in some dealers’ risk resilience—even channels like the Zhuhai store, in which IM Motors holds equity and participates in management, were not immune to cash flow breakdowns. IM Motors stated it is reviewing lessons learned and reevaluating its mechanisms to prevent recurrence, emphasizing strengthened dealer selection criteria, enhanced daily operational oversight, and the development of a robust risk early-warning system.