The mid-year reports from over a dozen A-share and H-share listed passenger car manufacturers have been fully disclosed as September begins, painting a stark picture of widening disparity across the industry.
BYD and SAIC Motor led the revenue rankings with 344.8 billion and 298.7 billion yuan respectively, while BYD and Geely Automobile topped the profit charts with net profits attributable to shareholders of 12.3 billion and 9.1 billion yuan.
Remarkably, half of the 14 carmakers with comparable year-on-year data recorded losses in the first half of the year. Among them, GAC GROUP posted a massive net loss of 4.467 billion yuan for the half-year period, dethroning NIO as the new "loss king" among listed passenger car manufacturers.
Where the cash cow ran dry and why the huge loss still doesn't show the full picture
The joint venture segment, once the most stable profit source for GAC GROUP, has now become its biggest drain. In the first half of the year, GAC Honda sales plummeted 55.82% year-on-year to just 68,300 units, with July sales falling a further 27% to only 11,700 units. During the same period, GAC Honda's revenue dropped nearly 60% year-on-year to 9.351 billion yuan.
Production capacity has already been slashed 40%, from 1.2 million to 720,000 vehicles. The investment income contribution from joint ventures to GAC GROUP has plunged more than 70%, from 8.349 billion yuan in 2023 to 2.485 billion yuan in 2025.
While the independent brand segment is viewed as the company's future hope, with sales reaching 346,000 units in H1, up 35.69% year-on-year to represent 44.75% of the group's total, this growth has failed to translate into profitability. The gross margin for vehicle manufacturing stands at negative 6.27%, and the overall gross margin is negative 1.11%, meaning the company loses money on every vehicle it sells.
The independent brands remain in a "cash-burning, market-share-grabbing" nurturing phase, with intensifying domestic competition and rising sales investments causing independent brand profits to decline sharply year-on-year.
More critically, GAC GROUP's research and development expenditure is not only low in absolute terms, but its expense recognition rate is a mere 20% or so — significantly below the 60%-80% levels typically seen at peers such as SAIC, Changan, and Great Wall Motor.
Excessive capitalization of R&D spending essentially hides costs that should be deducted in the current period within the balance sheet, inflating current profits and window-dressing performance. Despite consecutive quarters of major losses, GAC GROUP's financial statements still fail to fully reflect the company's true operational performance.
Inventory and turnover days at historic peaks, while overseas gross margin hits rock bottom
Feng Xingya officially took the helm as chairman of GAC GROUP in February 2025. In the full year following his appointment, the company swung from profit to a net loss of 8.8 billion yuan, followed by another 4.5 billion loss in the first half of this year.
Yet even after two rounds of "financial bathing" over the past year and a half, the company's performance risks remain unresolved. As of the end of June 2026, GAC GROUP's inventory had surged 45.45% from 16.446 billion yuan at the end of last year to 23.92 billion yuan — far outpacing the paltry 2.35% growth in sales volume.
Meanwhile, inventory turnover days reached 78 days, with both metrics hitting record highs for the corresponding period, highlighting enormous channel pressure.
Indeed, between 2022 and 2025, GAC GROUP reported cumulative asset impairment losses of 9 billion yuan, primarily from inventory and intangible asset impairments. In the first half of this year alone, asset impairments reached 807 million yuan, up 53% year-on-year — a clear signal that future impairment pressure remains elevated.
Notably, overseas expansion — widely considered the most effective strategy to counter domestic market saturation — is described by GAC GROUP as its "first growth curve." The company's overseas revenue reached 14.01 billion yuan in H1, accounting for 30.14% of total revenue, yet its overseas gross margin was a paltry 6.23%, significantly trailing comparable companies.
A 6% overseas gross margin suggests the company's international push is more about "losing money for the sake of appearance." Given the substantial investments still required for overseas channel development, KD plant construction, and brand promotion, the overseas business is unlikely to become a genuine profit engine for GAC GROUP any time soon.
In November 2024, GAC GROUP launched the three-year "Panyu Action" plan, with the core goal of raising independent brand sales to more than 60% of the group's total by 2027, targeting 2 million units. Feng Xingya has stated that 2026 is the year of "assault" for the plan, ushering in an "interior renovation" phase.
However, with half of 2026 now gone, GAC GROUP's completion rate against its full-year sales target stands at a mere 38%. The "assault year" report card for the "Panyu Action" can only be described as nothing short of a failing grade.
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