On March 16, the stock price of China’s leading automobile dealer, China Grand Holdings Limited (CGHL), plummeted by 15%. This drastic drop came after CGHL had previously announced on the evening of the 13th that they expected to incur a loss of no more than 2 billion yuan (RMB) in 2025, compared to turning a profit of 3.2 billion yuan in 2024. This marked the first annual loss for CGHL in over a decade since its listing.
Following the opening of the A-share market on March 16, CGHL experienced a significant gap down in stock price, plunging by over 18% at one point during the trading session. By the end of the day, CGHL’s stock had fallen by 15.42%.
The direct cause of the sharp decline in CGHL’s stock price on the 16th was attributed to the “Profit Warning” announcement made by CGHL on the previous trading day (the 13th).
The announcement stated, “By the end of the fiscal year ending on December 31, 2025 (‘2025 year’), the Company is expected to incur a loss attributable to the owners of the parent company of no more than 2 billion yuan, while in the fiscal year ending on December 31, 2024 (‘2024 year’), a profit of 3.2 billion yuan was recorded by the owners of the parent company.”
The announcement further explained the reasons for the losses, citing continued weak domestic consumer spending, an imbalanced supply-demand situation in the passenger car sector, intensified competition in the automotive industry, among other factors. Various aspects such as car sales recording continued gross losses, a decrease in the commission rate for automotive mortgage returns, a decline of nearly 50% in commission income from automotive finance business compared to 2024, and impairment affecting up to 2.5 billion yuan in 2025 due to macroeconomic, industry factors, goodwill, and intangible assets.
According to the “China Automobile Distribution Industry Dealers Top 100 List” released by the China Automobile Distribution Association, CGHL has consistently ranked as the leading dealer group in terms of revenue for many years. As a powerhouse in China’s automobile dealership sector, 2025 marked the first annual loss for CGHL in over a decade since its listing.
In response to this, an industry expert cited by The Paper on March 16 stated that CGHL’s first appearance of losses signals a significant challenge faced by mainland auto dealers in terms of survival.
The China Automobile Distribution Association believes that the Chinese auto market in 2025 is complex and volatile, with continued price inversion at the distribution end, further exacerbating the challenges of dealership survival, with an estimated net reduction of nearly 1,500 4S stores throughout the year.
Public information reveals that China Grand Holdings Limited is a nationwide auto dealership group in China focusing on luxury and mid-to-high-end brands such as Mercedes-Benz, Lexus, Audi, BMW, Volvo, among others.