Mit einem vorläufigen Verlust von über 1,8 Milliarden Yuan sucht die GAC Group Huawei, um die Situation zu retten.

During the continuous boom of new energy vehicles, some automotive giants are having a tougher time than before.

GAC Group, which once thrived in the fuel - powered vehicle era by leveraging both joint - venture and self - owned brand strategies, is also experiencing growing pains brought about by industry transformation. In the first half of this year, GAC Group turned from profit to loss. It is estimated that the company will incur a loss of 1.82 - 2.60 billion yuan in the first half of the year. This will be the first half - year loss report since the automotive giant went public.

With the continuous increase in new energy vehicle penetration and fierce industry competition, GAC Group is actively implementing reforms, trying to stabilize sales and find new growth points. Can this veteran automotive giant succeed?

Nearly 110,000 fewer vehicles sold in the first half of the year, and the achievement rate of Chairman Feng Xingya's annual target is less than 40%

According to the performance forecast, GAC Group expects its net profit attributable to the parent company to be between - 1.82 billion yuan and - 2.60 billion yuan, and the net profit after deducting non - recurring gains and losses to be between - 2.12 billion yuan and - 3.20 billion yuan in the first half of the year.

Compared with the net profit attributable to the parent company of - 0.732 billion yuan and the net profit after deducting non - recurring gains and losses of - 0.893 billion yuan in the first quarter of this year, it can be seen that GAC Group's loss in the second quarter of this year has significantly widened on a quarter - on - quarter basis.

The performance forecast announcement shows that there are multiple reasons for GAC's losses in the first half of this year. Firstly, the sales of many new models failed to meet the planned targets, and the revenues of several major models declined due to price factors. Secondly, the efficiency of the domestic marketing system, self - owned brands, and overseas business all need further improvement.

In terms of sales volume, GAC Group sold a total of 755,300 vehicles in the first half of this year, a year - on - year decrease of 12.48%, 107,700 fewer than in the first half of 2024.

Among them, GAC Honda sold 154,600 vehicles in the first half of the year, a year - on - year decrease of 25.63%. It is the business segment with the largest decline in GAC Group's sales volume, with a year - on - year decrease of 53,300 vehicles. From January to June this year, except for a year - on - year increase in sales in March, GAC Honda's sales declined in other months.

GAC Trumpchi (formerly GAC Passenger Vehicle), which had a strong sales performance last year and was the only business segment with a counter - cyclical increase, also showed a significant decline. From January to June, it sold 146,300 vehicles, a year - on - year decrease of 22.55%, with a decrease of 42,600 vehicles, hitting a new half - year sales low since 2021.

As for GAC Aion, the new energy business, it sold 108,700 vehicles in the first half of the year, a year - on - year decrease of 13.97%, with a decrease of 17,700 vehicles. It is worth noting that Aion's sales began to decline in 2024 and have not stopped falling yet.

However, GAC Toyota managed to stabilize its sales in the first half of this year. It sold 344,700 vehicles in the first half of the year, a slight year - on - year increase of 2.58%, with an increase of 8,672 vehicles. In terms of sales structure, GAC Toyota's sales in the first half of the year accounted for 45.63% of GAC Group's total sales. The stabilization and recovery of GAC Toyota partially offset the decline of other brands.

Meanwhile, as the profit pillar of GAC Group, the stabilization and recovery of GAC Toyota's business segment are expected to have a positive impact on GAC Group's performance.

In terms of energy type, GAC Group sold 154,100 new energy vehicles in the first half of this year, a year - on - year decrease of 6.08%, with a new energy vehicle penetration rate of 20.41%. The sales of energy - saving vehicles (such as HEV) were 211,600, a year - on - year increase of 13.43%.

Judging from the stabilization and recovery of GAC Toyota's sales, the reforms being carried out by GAC Group have achieved certain results. At the end of 2024, GAC Group launched the three - year "Panyu Action", focusing on promoting the development of self - owned brand business and shifting the management of self - owned brands from strategic control to operational control.

At the beginning of this year, Feng Xingya, the new chairman of GAC Group, announced three key tasks for 2025 at the GAC Group's High - quality Development Conference and the Mobilization Meeting for a Good Start in the First Quarter: "Stabilize joint - ventures, strengthen self - owned brands, and expand the ecosystem". At the same time, he set a business plan target of a 15% year - on - year increase in production and sales for the whole year.

Comparing GAC Group's production of 1.9166 million vehicles and sales of 2.0031 million vehicles in 2024, GAC Group's challenging target this year will reach 2.2041 million vehicles in production and 2.3036 million vehicles in sales. However, judging from the production and sales volume in the first half of this year, GAC Group only completed 36.37% of the target production and 32.79% of the target sales, both less than 40%.

This also means that GAC Group may face greater sales pressure in the second half of this year.

In the announcement, GAC Group said that in the second half of the year, the company will continue to promote the work of "stabilizing joint - ventures, strengthening self - owned brands, and expanding the ecosystem". Through a series of measures such as launching new extended - range models, accelerating channel expansion to lower - tier markets, and strengthening new media marketing, it will strive to increase sales and improve profits.

Decoding the reasons behind GAC Group's under - performing new models: The dilemma between pricing and sales

In the announcement, GAC Group said that the under - performance of many new energy models in the first half of the year was one of the reasons for its losses.

Among the new energy models launched in the first half of the year, the Honda P7 caused a lot of controversy before its launch due to the naming of the "Ye" brand. After its launch, it was priced between 199,900 and 249,900 yuan, but functions such as automatic lane - change assist and high - speed driving assist needed to be optionally configured. These functions have become standard in some domestic models priced at around 130,000 yuan, so the competitiveness of the P7 is not outstanding.

Since its launch in April, the sales of the Honda P7 were 437, 142, and 166 vehicles respectively, and the cumulative sales in three months did not exceed 1,000.

The Trumpchi Xiangwang S7 is a mid - to - large SUV. Currently, in the market, only a few mid - to - large SUVs such as the Li L series, Leapmotor C16, BYD Tang L, AITO M7, Zhijie R9, Wei Brand Lanshan, IM LS6, BMW X5, and Volkswagen Teramont can sell more than 3,000 vehicles per month. The market competition is fierce. Since its launch five months ago, the cumulative sales of the Trumpchi Xiangwang S7 have been 7,268 vehicles.

As for the Hyper HL, it is a new model of Hyper, a high - end brand under GAC. Without a first - mover advantage in brand influence, a high - end brand like Hyper should offer strong cost - performance. However, the Hyper HL, with a starting price of 269,800 yuan, still uses the lower - cost MacPherson independent front suspension, which also affects the choices of some consumers. From April to June, its sales were 303, 618, and 359 vehicles respectively, significantly lagging behind the Deepal S09 and Lynk & Co 900 launched during the same period.

The under - performance of these new models reflects to some extent the interest dilemma of veteran automakers like GAC Group in the face of the new situation of automotive market competition. On the one hand, the market price competition is expected to continue. On the other hand, it is difficult to give up the benefits brought by medium - to - high pricing and positioning, and high pricing will inevitably affect sales and limit production ramp - up.

For example, in the pricing of the AION UT. The AION UT is positioned as a small - sized car, slightly larger than the BYD Seagull and Geely Xingyuan. With a starting price of 69,800 yuan, this size and starting price are very competitive in the small - car market dominated by cost - performance. It received high attention at its launch on February 28, and the market expected it to replicate the sales miracles of the BYD Seagull and Geely Xingyuan.

However, according to social media, at the beginning of its launch, the lowest - configuration AION UT priced at 69,800 yuan was not in production, and consumers had to wait for several months for the second - lowest - configuration version priced at 78,800 yuan. Most of the produced models were mid - to - high - configuration versions with a 420 - kilometer range, and the starting price reached 83,800 yuan, greatly weakening its cost - performance and seriously affecting its reputation.

After the first wave of consumers were "deterred" by the pricing, GAC Aion did not choose to mass - produce the lowest - configuration version priced at 69,800 yuan. Instead, on April 29, it officially launched a new configuration with a starting price of 73,800 yuan. This new - version model has some additional functional configurations compared with the lowest - configuration version, and the price has increased by 4,000 yuan.

Comparing with the Geely Xingyuan, its current official starting price is 68,800 yuan, and the limited - time offer price starts from 65,800 yuan. Previously, the limited - time subsidy price at the end of June even reached 59,800 yuan, more than 10,000 yuan lower than the second - lowest - configuration version of the AION UT.

In June this year, the monthly sales of the Geely Xingyuan exceeded 40,000, the monthly sales of the BYD Seagull exceeded 30,000, and the sales of the BYD Dolphin and Wuling Bingo were 18,000 and 13,000 respectively. However, the sales of the AION UT were only 5,346, with a huge gap compared with the top four.

In this "dilemma" between sales and profits, cooperation with Huawei has become an important breakthrough for GAC Group.

Huawei's influence in the high - end brand market has been proven in the automotive market. AITO has become one of the few high - end brands in China in just a few years, and SERES achieved a net profit of 2.7 - 3.2 billion yuan in the first half of the year. If the cooperation with Huawei can achieve a breakthrough in the high - end market, GAC Group is expected to reduce the impact of price competition and turn losses into profits.

On May 26 this year, GAC Trumpchi launched the Trumpchi Xiangwang M8 Kunlun, equipped with Huawei's Kunlun Intelligent Driving System and Hongmeng Intelligent Cockpit, with a starting price of 359,900 yuan, more than 70,000 yuan more expensive than the 2025 - model Trumpchi M8 Master series. However, as of now, GAC Trumpchi has not announced the sales of the Xiangwang M8 Kunlun, and Yiche.com and Dongchedi have not included this model and its sales data.

In the second half of this year, GAC Trumpchi will launch the Xiangwang S9, which will be standard - equipped with Huawei's Kunlun Intelligent Driving ADS4 across all series. It has not been officially released yet. Meanwhile, the Huawang Automobile, a joint venture between GAC and Huawei, will launch its first model in 2026, targeting the high - end market in the 300,000 - yuan range.

As mentioned above, with the overall decline in sales and the new energy vehicle business still in the ramp - up stage, GAC Group needs new profit growth points to turn losses into profits. Whether the cooperation with Huawei can replicate the success of SERES AITO, Chidu Business will continue to pay attention.

This article is from the WeChat official account “Delin She” (ID: delinshe), author: Dong Wuying, reprinted by 36Kr with permission.