In 2025, China's automobile production and sales reached 34.531 million and 34.4 million vehicles, respectively, representing year-on-year growth of 10.4% and 9.4%. The penetration rate of new energy vehicles surpassed the 50% threshold for the first time, while the market share of domestic brand passenger vehicles approached 70%.
As production and sales scale reached new highs, new energy vehicle penetration continued to rise, and exports grew robustly, the automotive industry also entered a deeper phase of adjustment. Price wars coupled with high research and development investments have kept industry profit margins under sustained pressure, leading to significant divergence in the operating performance and financial indicators of listed automakers.
Among major A-share and H-share listed automakers, Great Wall Motor received government subsidies amounting to 37.5 billion yuan in 2025, significantly exceeding those of domestic industry leaders such as BYD, Geely, and SAIC. Concurrently, the company's annual government subsidies increased against the trend by 9.3 billion yuan, marking the highest growth rate.
In 2025, Great Wall Motor achieved operating revenue of 222.824 billion yuan, a year-on-year increase of 10.20%. However, its net profit attributable to shareholders was only 9.865 billion yuan, a decline of 22.07% compared to the previous year. Against the backdrop of declining net profit, the government subsidies received by Great Wall Motor rose sharply against the trend, providing an unprecedented level of support to its profits.
Within the government subsidies, "vehicle scrappage subsidies" accounted for 22.74 billion yuan, constituting the primary subsidy item for Great Wall Motor. This subsidy actually originates from the refund of vehicle scrappage taxes in Russia. Starting October 1, 2024, Russia significantly increased its vehicle scrappage tax by 70% to 85%, with further annual increments of 10% to 20% stipulated each January until 2030. Only enterprises with full-process production capacity within Russia are eligible to apply for refunds. Great Wall Motor, with its full-process factory in Tula Oblast, Russia, boasting an annual production capacity of 150,000 vehicles, secured nearly a 100% refund of the scrappage tax. This implies that nearly forty percent of Great Wall Motor's net profit relies on policy-driven tax refunds from the Russian market, rather than stemming from endogenous growth of its core business operations.
In 2025, Great Wall Motor sold 1.3237 million new vehicles for the full year, a year-on-year increase of 7.23%. However, its overall gross profit margin decreased by 1.47 percentage points year-on-year, falling from a relatively high level to 18.04%.
Simultaneously, Great Wall Motor's overseas sales reached 506,100 vehicles, an increase of 11.68% year-on-year. However, its overseas gross profit margin declined by 2.06 percentage points year-on-year to 16.70%, which was already lower than the 18.61% gross margin of its domestic business during the same period.
In fact, Great Wall Motor's costs grew by 12.40%, while revenue increased by only 10.19%. The cost growth rate exceeding the revenue growth rate indicates that selling each additional vehicle is, in fact, eroding profits.
The root of this dilemma of "volume increase without price increase" lies in the continuous deterioration, rather than improvement, of Great Wall Motor's product mix. The Haval brand, with its thin profit margins, remains the primary sales driver, accounting for approximately 57% of the group's total sales. Meanwhile, the share of the high-premium, high-margin Tank brand has failed to achieve substantial growth. The core price segment of 150,000 to 250,000 yuan lacks sufficiently influential products, and the product matrix in the high-end segment above 300,000 yuan still lacks effective brand power support.
It is noteworthy that in the fourth quarter of 2025, Great Wall Motor's net profit per vehicle had sharply declined to approximately 3,000 yuan. This metric is approaching the profit bottom line considered necessary for a healthy automotive operation.
For comparison, leading automakers such as BYD, Geely, and Changan are also actively seeking various government subsidies and tax incentives. However, none of them exhibit a level of reliance on government subsidies for their core business profits that reaches the proportion seen at Great Wall Motor.
The industry widely holds that the profit foundation of a robust vehicle manufacturer should be the endogenous profit derived from sales premiums and technology premiums of high-end products. While Great Wall Motor's non-GAAP net profit shrank by 37.5% compared to the previous year, its government subsidies increased to 37.5 billion yuan. Should subsidies be phased out or Russian policies change, the question arises: how much profit and price reduction room would remain for Great Wall Motor?
Comments