GAC GROUP disclosed its financial results for the first quarter of 2026 on the evening of April 29. During the period, the company achieved operating revenue of 20.039 billion yuan, a slight year-on-year increase of 1.98%. The net loss attributable to shareholders of the parent company narrowed by 10.29% to 656 million yuan compared to the same period last year. Superficially, these figures suggest a phase of stabilizing performance.
However, within the intensely competitive automotive market, GAC GROUP remains deeply entrenched in a painful transition between old and new growth drivers. The restructuring of its internal business segments is far more drastic than the changes reflected in the revenue figures.
A breakdown of first-quarter revenue and sales composition reveals a clear reversal into an "inverted U-shaped" structure. The traditional profit contributors, GAC Toyota and GAC Honda, are in a phase of strategic contraction and production line adjustments, while the proprietary brands have robustly emerged as the engine driving growth.
This rise is evident not only in the absolute numerical increase but also in their bolstering effect on the group's overall performance. Data shows that GAC GROUP's cumulative sales in the first quarter reached nearly 380,000 vehicles, representing a slight overall increase of 2.38%. Within this, sales of proprietary brand passenger vehicles surged to 166,200 units, a sharp year-on-year increase of 42%. The two leading proprietary brands, GAC Aion and GAC Trumpchi, delivered impressive growth rates of 57.34% and 33.06%, respectively.
The ascent of the proprietary brands is accompanied by strong outward expansion momentum. GAC's export sales in the first quarter reached 42,200 vehicles, a surge of over 80% year-on-year. This indicates that during a period of fluctuating profit contributions from joint ventures, GAC's proprietary brands have not only stabilized their foundation in the fiercely competitive domestic market but have also found structural growth opportunities through overseas expansion.
The proportion of the proprietary brand segment within the group is undergoing a historic transformation, marking a substantive step for GAC in reducing its reliance on joint ventures.
Against the backdrop of an expanding loss in its main business, the most notable figure in the financial report is the significant 42.06% year-on-year increase in research and development expenses. Choosing to ramp up R&D investment during a period of profit pressure appears less like an aggressive expansionary move and more like a defensive action necessitated by the wave of technological iteration.
The competitive logic of the current automotive industry has fundamentally shifted. The focus of competition in the domestic market is rapidly moving beyond mere electrification acceleration towards deeper evolution in the energy efficiency of electric drive systems, cross-device ecosystem integration for smart cockpits, and the industry-wide pursuit of embodied AI.
Faced with relentless pressure from new automakers in the field of intelligent driving and the comprehensive deployment of new energy technology stacks by companies like Chery and SAIC, GAC GROUP must maintain a high level of capital investment. This sharp increase in R&D spending is the necessary cost for GAC to secure its place at the table for the next generation of intelligent electric vehicles. If it fails to build its own moat in core technologies such as embodied AI and next-generation electronic and electrical architectures, its brand's upward mobility will lack foundation, and the high growth of its proprietary brands will be devoid of long-term technological premium support, easily trapping them in the mire of low-end price wars.
Looking ahead, GAC GROUP faces both an abyss and a springboard. The key to breaking through lies in whether it can complete the fundamental shift in its growth drivers before its cash flow is completely exhausted. The greatest opportunity clearly points towards globalization. As the geopolitical landscape of the global automotive industry shifts, GAC's ability to rapidly translate the relative advantages in intelligence honed by its proprietary brands domestically into absolute sales volume and profit margins in overseas markets will be the critical factor for achieving profitability in the next two years.
Overall, GAC GROUP's Q1 2026 report illustrates the difficult balancing act of a traditional automaker caught between the collapse of the old order and the establishment of a new system. The modest revenue growth and the sharp increase in R&D investment demonstrate that management retains the strategic resolve to anchor its future in technology. However, the expanding loss in the main business also sounds an alarm. For GAC, enabling its proprietary brands to achieve a qualitative transformation from scale expansion to high-quality profitability before the profits from joint ventures completely fade away has become a race against time with no room for retreat.