GAC enters a "wartime state" after suffering a huge mid - term loss for the first time.

"Today, GAC has fully entered a 'wartime state.'" At the 2025 China Auto Forum, Feng Xingya, Chairman and General Manager of GAC Group, made a profound statement.

Shortly after, GAC Group released its performance forecast: In the first half of 2025, the company is expected to turn from profit to loss year - on - year, with the net loss attributable to the parent company ranging from 1.82 billion to 2.6 billion yuan. In the same period of 2024, GAC Group recorded a net profit attributable to the parent company of 1.52 billion yuan.

In fact, in the first quarter of 2025, GAC had already suffered a loss of 730 million yuan, indicating that the loss in the second quarter would further expand to between 1.13 billion and 1.87 billion yuan. The industry is full of concerns about the company's annual performance.

As the first state - owned automobile group to be listed on both A - shares and H - shares in China, GAC once had an advantage in the fuel - vehicle era relying on joint - venture brands such as Toyota and Honda. However, its performance has been declining since 2022, and it may face its first annual loss in 13 years since listing in 2025.

At the beginning of 2025, Feng Xingya officially succeeded Zeng Qinghong as the new helmsman of GAC Group. Can he lead this "cornered beast" out of the performance quagmire and achieve self - breakthrough?

First Mid - term Profit to Loss

In recent years, GAC has always regarded itself as a pioneer in the new - energy transformation. However, in the rounds of industrial competition, it "started early but arrived late," and its overall performance has been affected by the failure of the new - energy transformation. This is reflected in its sales volume and financial reports.

Actually, signs of "blood loss" in GAC's profit side were already visible in 2023. Although the net profit attributable to the parent company for the whole year of 2024 was 700 million yuan, the actual loss after deducting non - recurring gains and losses was as high as 2.48 billion yuan. In the first quarter of 2025, the company directly turned from profit to loss, with continuous declines in sales volume and revenue. The difficulty of the "elephant's turn" is fully demonstrated in a series of weak data.

In June 2025, GAC Group's sales volume was 150,100 vehicles, a year - on - year decrease of 8.22%. The cumulative sales volume in the first half of the year was 755,300 vehicles, a year - on - year decrease of 12.48%. According to data from the China Association of Automobile Manufacturers, in the first half of this year, the production and sales of passenger cars in China reached 13.522 million and 13.531 million respectively, with year - on - year increases of 13.8% and 13% respectively.

In the self - owned brand camp, the "twin stars" of GAC Trumpchi and GAC Aion failed to shoulder the growth flag. Their sales volumes in the first half of the year decreased by 22.55% and 13.97% respectively year - on - year.

The decline of GAC Trumpchi is mainly due to the fact that among the more than 10 models currently on sale, fuel vehicles account for the majority. In the wave of new - energy transformation, its pace is a bit slow. Although Trumpchi also has new - energy models, the main sales growth points are still concentrated in the MPV market. In the broader SUV and sedan markets, Trumpchi is facing the current situation of weakness in both traditional fuel and new - energy vehicles.

As a brand that started early in the new - energy field, GAC Aion has accumulated a large user base with its first - mover advantage. However, the enterprise has certain shortcomings in the market structure. The proportion of B - end users is relatively high, and the share of the low - end market is large, resulting in insufficient stability of the user group. Affected by this, any slight market fluctuation will have a direct impact on sales volume. After several years of high - speed growth, GAC Aion encountered an obvious growth bottleneck in 2024, with an annual sales volume of 374,900 vehicles, a year - on - year decrease of 21.9%.

Among the joint - venture brands, GAC Toyota is the only growing brand under the group, which is related to its car - purchase discounts. This year, GAC Toyota launched car - purchase benefits such as "one - price - to - the - end" and "one - warranty - to - the - end." The official prices of all models of the two SUVs, Venza and Highlander, were reduced by up to 44,000 yuan and 39,000 yuan respectively. However, the sales performance of GAC Honda, which also launched a fixed - price promotion, was not ideal.

Joint - venture enterprises are no longer a continuous "cash machine" for GAC. In 2024, the joint - venture segment of GAC contributed 60.5% of the sales volume, but the profit margin dropped sharply from 85% in 2019 to less than 40% in 2024.

Aion tried to enter the high - end market by launching the high - end brand Hyper, but the results were meager. In 2024, only 15,600 vehicles were sold throughout the year, showing an obvious gap with the leading high - end new - energy brands.

Meanwhile, Hozon Auto "exploded a mine," and GAC Fiat Chrysler was liquidated. The company had to bear the relevant legacy risks, making the situation even worse.

With the poor performance, the stock price also followed suit. As of the close on July 16 this year, the stock price of GAC Group has cumulatively declined by more than 18%, underperforming the Shanghai Composite Index (up 4.54%).

Multiple Pressures from Market, Channels, and Management

In the latest announcement, GAC Group analyzed the main reasons for the loss.

First, several key new - energy models launched are still in the sales - climbing period and have not reached the planned targets. Many main models have seen a decline in revenue due to the price war.

With the continuous increase in the penetration rate of new - energy vehicles, the industry competition is extremely fierce. Since the start of the auto price war in early 2023, the entire industry has been trapped in the quagmire of passive price cuts. Cui Dongshu, the secretary - general of the China Passenger Car Association, revealed that in the first half of 2025, the average selling price of main models in the passenger - car market was reduced by 21,000 yuan, a decrease of up to 11.4%. And the profit margin has also been significantly compressed. Before 2022, the profit per vehicle had never been lower than 20,000 yuan. In 2023 and 2024, it decreased to 17,000 yuan and 15,000 yuan respectively. In the first five months of 2025, it further shrank to 14,000 yuan.

The decline in profits and intensified competition have forced most automakers, including GAC, to make a difficult trade - off between sales volume and revenue. Although sales revenue will inevitably be affected, they have to join the price war to maintain their market share.

Second, the existing sales channels dominated by 4S stores are structurally mismatched with the needs of the new - energy transformation. The construction of new channels such as direct sales, agency, and the Internet lags behind that of peers, resulting in a slow improvement in the efficiency of the marketing system.

It is understood that currently, 4S stores account for as high as 70% of GAC Group's sales channels, while the proportion of new channels such as direct sales, agency, and the Internet is only 30%. Compared with the industry average, the construction of new channels is significantly lagging.

Meanwhile, the game between internal management and the process of reform and transformation also has a profound impact. To solve problems such as insufficient synergy and innovation of self - owned brands, redundant management levels, and low decision - making efficiency, GAC launched the three - year "Panyu Action" at the Guangzhou Auto Show last year. The company's headquarters was relocated to Panyu, Guangzhou as a whole. New headquarters for product, procurement, finance, and brand marketing were established, and the industry - recognized IPD (Integrated Product Development) process was introduced, aiming to improve the efficiency of new - product development and digital management capabilities.

As Feng Xingya said, GAC's special structure - "sons first, father later," that is, the establishment of the group after the establishment of many subsidiaries, makes it difficult for many reform measures to take effect immediately. In his opinion, some adjustments yield immediate results, while others require a longer period of pain and precipitation.

It is worth mentioning that at the 2025 China Auto Forum, Feng Xingya also reflected on the early strategic "misjudgment" in technology and product routes.

Actually, as early as 2014, GAC had completed the "R & D and industrialization technology research on range - extended pure - electric sedans" and was the first in China to mass - produce Trumpchi range - extended pure - electric sedans.

However, due to inaccurate market judgment, GAC once thought that range - extended and plug - in hybrid were only transitions from fuel to pure - electric. "We didn't grasp consumers' mileage anxiety well and missed the opportunity of the rapid development of range - extended and plug - in hybrid technologies in recent years," Feng Xingya admitted.

Feng Xingya, Chairman and General Manager of GAC Group

Facing the profound changes in the industrial environment, GAC is accelerating self - adjustment. Feng Xingya revealed that since this year, GAC has re - sorted out and rapidly promoted the diversified layout of models and technology routes, focusing on the range - extended and plug - in markets. It is expected that the range - extended version of Hyper HL will be launched and delivered to the market next month.

Life - and - Death Race in the Deep - Water Area of Reform

In 2025, GAC Group set a sales target of a 15% year - on - year increase, that is, 2.3 million vehicles. In the first half of this year, the target completion rate was only 32.84%.

Reform is the only lifesaver for GAC. GAC has formulated a three - year "Panyu Action" plan, aiming to achieve a sales volume of 2 million vehicles for self - owned brands by 2027. Currently, half of the Panyu Action has passed, but it is facing the test of "easier said than done." The external market competition is becoming more and more fierce, and the internal promotion speed of the group has not kept up.

During this period, the most externally concerned action is undoubtedly the aforementioned relocation of the headquarters. To enhance front - line decision - making power and response speed, GAC Group moved its headquarters to Panyu, Guangzhou, trying to break the inertia and barriers of traditional large enterprises and achieve pre - coordinated synergy in brand, management, procurement, product, and finance.

As GAC envisioned, the three brands of "Trumpchi, Aion, and Hyper" will achieve a high degree of integration in R & D, production, and sales, promoting the comprehensive optimization of internal resources.

However, during the reform process, the structural inertia of the organization and different brand demands have led to an unsmooth merger process. In March 2025, the R & D teams of the three brands announced that they would continue to remain relatively independent, and only build and share centers in core links such as procurement and partial R & D. The real integration still needs time to promote.

The pain in organizational change has not been resolved, and GAC Aion has recently encountered the so - called market rumor of "employee stock - ownership explosion." Information about the obstruction of Aion's IPO plan, the shrinkage of employee equity valuation, and the equity recovery after executives' retirement was once in full swing. Although the official clarified in time, the storm reflects the capital market's uneasiness about the group's radical reform and also highlights the trust and governance problems in GAC's transformation process.

Another reform measure worthy of attention is GAC's self - innovation in employee incentives and performance management. Recently, the sixth meeting of the seventh - session board of directors of the company officially revised the new system of employee compensation, benefits, and performance appraisal.

Cost reduction and efficiency improvement have become the current main theme. Especially in difficult times, the senior management takes the lead. Actually, in 2024, the compensation systems of the company's governance layer and senior management were significantly adjusted. Taking Feng Xingya as an example, his compensation in 2024 was 830,100 yuan lower than that in 2023 (a decrease of 29.5%).

Under the pressure of lack of highlights in transformation and breakthrough, GAC actively seeks external empowerment. In July, Feng Xingya visited Ren Zhengfei, the founder of Huawei in Shenzhen, aiming to learn from Huawei's experience in rapid growth and strategic breakthrough and promote in - depth cooperation in the "Hua - Wang" project between the two sides. It is reported that the first model jointly developed by GAC and Huawei, a high - end innovative product targeting the 300,000 - yuan - level market, is expected to be launched in 2026.

For GAC, with the success of AITO in front, cooperation with Huawei is a very stable and worry - free option. However, Huawei has many cooperation partners at present. The resource input, interest distribution, and building of mutual trust between GAC and Huawei are the keys to whether the two sides can spark a spark.

In addition to strengthening cooperation with Huawei, GAC is also accelerating the layout of the overseas market as a new growth pole. In 2024, the group's overseas automobile sales volume reached 127,000 vehicles, a year - on - year increase of 67.6%. The successive establishment of the CKD factory in Malaysia and the GAC Aion intelligent factory in Thailand mark that GAC's overseas market has been upgraded to emphasize both vehicle exports and local production. The breakthrough in the overseas market plays an important role in further digesting excess production capacity, boosting sales volume, and dispersing risks.