On July 11, GAC GROUP released its semi-annual performance forecast for 2025, projecting a net loss attributable to shareholders of 1.82-2.6 billion yuan, marking the company's first half-year loss in 20 years. This continues the deteriorating performance trend from 2024 and exposes multiple issues in the company's new energy transformation and market competition.

**01** **Half-Year Loss Up to 2.6 Billion Yuan - GAC GROUP's Performance Continues to Deteriorate**

The performance forecast released by GAC GROUP on July 11 shocked investors. In GAC GROUP's stock forum, pessimists predicted "meeting at the daily limit down," while optimists joked that "loss-making stocks are the current trend." On the first trading day after the announcement, GAC GROUP's A-shares fell over 1%, while H-shares also declined nearly 1%. Year-to-date, both GAC GROUP's A+H shares have performed weakly, with A-shares down 19.81% and H-shares down 9.55%, significantly underperforming the industry average.

According to the announcement, GAC GROUP's performance in the first half of 2025 showed significant decline with continued deterioration in operating fundamentals. The company's net profit attributable to shareholders is expected to be -1.82 billion to -2.6 billion yuan, while net profit excluding non-recurring gains and losses expanded further to approximately -2.12 billion to -3.2 billion yuan.

GAC GROUP's performance has deteriorated continuously in recent years. In 2023, the company achieved revenue of 129.7 billion yuan, up 17.62% year-on-year, but net profit attributable to shareholders plummeted to 4.429 billion yuan, down 45.08% year-on-year, with adjusted net profit falling by half. This decline rate not only hit a new high since 2013, but the net profit scale also regressed to 2015 levels.

The performance decline continued in 2024: net profit attributable to shareholders is expected to be 0.8-1.2 billion yuan, down 72.91% to 81.94% year-on-year; adjusted net profit was -3.3 billion to -4.7 billion yuan, decreasing 192.37% to 231.56% year-on-year. The last time GAC GROUP's net profit attributable to shareholders was within 1.2 billion yuan was in 2012.

**02** **Former Profit Pillars GAC Honda and Toyota Both Lose Momentum**

During the fuel vehicle era, with fuel-efficient Japanese cars selling well, GAC GROUP enjoyed lucrative profits from its two major joint venture brands - GAC Toyota and GAC Honda. According to CPCA data, new energy passenger vehicles achieved a domestic retail penetration rate of 47.6% in 2024, expected to increase to 57% in 2025. Benefiting from this trend, domestic independent brand automakers' market share has grown rapidly, severely squeezing the joint venture car market. As new energy vehicle sales continue to accelerate, traditional fuel vehicle territory is shrinking. Consequently, former profit pillars GAC Honda and Toyota both lost momentum. The two brands once contributed over 70% of GAC GROUP's profits but both plummeted synchronously in 2024.

GAC GROUP sold 2.0031 million vehicles in 2024, down 20% year-on-year. Both GAC Toyota and GAC Honda experienced double-digit sales declines in 2024. Financial reports show GAC Honda's 2024 sales fell 26.52% year-on-year with revenue declining 27.03%; GAC Toyota's 2024 sales dropped 22.32% year-on-year with revenue decreasing 28.34%.

Entering 2025, GAC GROUP's sales decline trend continues, but internal brand performance shows clear differentiation.

According to GAC GROUP's latest official data, vehicle sales in the first half of 2025 were 755,300 units, down 12.48% year-on-year. GAC Toyota sales were 344,700 units, up 2.58% year-on-year; GAC Honda sales were 154,700 units, down 25.63% year-on-year; GAC Trumpchi sales were 146,300 units, down 22.55% year-on-year; new energy vehicle brand GAC Aion sales were 108,700 units, down 13.97% year-on-year. Except for joint venture brand GAC Toyota's slight sales growth, other brands experienced almost across-the-board declines.

CPCA data shows that from January to June 2025, GAC Toyota's retail sales were only 364,200 units, up 0.6% year-on-year, ranking 9th among manufacturers, far behind BYD (1.61 million units, up 16.0%) and Geely (1.226 million units, up 61.5%).

**03** **New Energy Transformation Faces Heavy Challenges**

As the main force in GAC GROUP's new energy transformation, GAC Aion carries high expectations. 2023 was GAC Aion's highlight year, with cumulative sales of 480,000 units, up 77% year-on-year, and peak monthly sales exceeding 50,000 units.

However, the situation reversed dramatically. In 2024, despite continued expansion of the new energy vehicle market, GAC Aion's sales declined against the trend, with annual cumulative sales of 374,900 units, a sharp 21.9% decrease from 2023's 480,000 units, completing only half of the year's sales target. In the first half of 2025, GAC Aion sales were 108,700 units, averaging 18,100 units per month, representing a 50% decline from 2023's peak.

GAC Aion's abandonment by consumers is not surprising. The brand has consistently "bet" on the ride-hailing market. CPCA data shows that among 850,000 new taxi/ride-hailing vehicles in 2023, Aion provided approximately 220,000 units, accounting for 45% of its annual sales and about 25% of that year's total new ride-hailing vehicle additions. However, success through ride-hailing also led to failure through ride-hailing. GAC Aion's success largely benefited from its precise layout in the ride-hailing market, but this also cost it favor in the private consumer market.

Recently, GAC Aion's employee stock ownership plan has attracted market attention, with some media reports claiming employees face huge losses due to equity valuation shrinkage, even collective refusal to pay interest and preparation for labor arbitration. GAC Aion has issued statements denying these reports.

As early as 2022, there were reports that GAC Aion was planning an IPO, but this has not materialized to date. Regarding GAC Aion's IPO progress, GAC GROUP Chairman Feng Xingya frankly stated: "We believe now is not the best time for GAC Aion to go public. Currently, our most important task is to focus on maximizing GAC Aion's valuation and find the right timing for capital operations, which may include continuing to promote Aion's listing or GAC GROUP acquiring Aion shares through additional issuance."

**04** **How Should GAC GROUP Respond**

Regarding the reasons for the company's massive losses, GAC GROUP listed four factors in its announcement:

First, several key new energy vehicle models launched during the reporting period are still in the ramp-up phase and have not met planned targets, with multiple main models seeing declining returns due to price war impacts;

Second, structural mismatches exist between existing sales systems and new energy transformation needs, with sales channels primarily led by traditional 4S stores, lagging behind peers in building new channels like direct sales, agency, and internet channels, with slow improvement in marketing system efficiency;

Third, independent brand integrated operation reform implementation still needs time to show results, with the company still continuously advancing new product development efficiency improvement and cost control across various fields during the reporting period;

Fourth, the company has weak overseas sales foundations and still needs improvement in channel construction, product management, and operational coordination.

At the 2025 China Automotive Forum, GAC GROUP Chairman and General Manager Feng Xingya announced that GAC GROUP has fully entered a "wartime state" and will fight with full force the "three major battles" crucial for the future: "user demand battle, product value battle, and service experience battle." Feng Xingya stated that starting this year, GAC will continuously introduce multiple range-extended and plug-in hybrid models. In August this year, the GAC Hyper HL range-extended version will officially launch and deliver.

Currently, China's automotive industry "involution" has spread from price wars to global markets, triggering strong regulatory backlash. In 2023, former GAC GROUP Chairman Zeng Qinghong publicly called for "less involution, more collaboration," but in 2025, the industry's involution trend has intensified rather than decreased. Against this backdrop, traditional automakers represented by GAC GROUP are deeply mired in transformation pains. Behind GAC GROUP's massive performance losses lies the core issue of sales system mismatches and lagging new energy layout under involutionary competition: main models seeing sharp return declines due to price war impacts, channel reforms lagging behind peers, and weak overseas expansion. If companies cannot quickly reconstruct sales networks and accelerate technological breakthroughs, the loss quagmire may continue to deepen.