Guangzhou Automobile Group Co., Ltd. (GAC Group) announced on August 29 that the net profit attributable to shareholders of the listed company in the first half of this year was a loss of 4.467 billion yuan, a decrease of 75.98% year-on-year. This indicates that GAC Group was not immune to the slump in the Chinese automobile market.
GAC Group released its “2026 Interim Report” on the 29th. The announcement stated that during the reporting period, the operating income was 46,121,297,818 yuan, a year-on-year increase of 9.38%; the total profit was -5,570,639,470 yuan, a year-on-year decrease of 41.92%; the net profit attributable to shareholders of the listed company was -4,466,859,300 yuan, a year-on-year decrease of 75.98%; and the net profit after deducting non-recurring gains and losses attributable to shareholders of the listed company was -5,209,121,398 yuan, a year-on-year decrease of 76.86%.
The data shows that GAC Group is facing a situation of revenue growth without profit growth.
Regarding the group’s losses, GAC Group stated in the announcement: “Intensified market competition in the mainland, continuous increase in sales investment for independent brands, coupled with changes in product sales structure and rising upstream raw material costs, led to a year-on-year decline in profits for independent brands; in addition, joint venture brands are under pressure, increased sales investment and rising costs in the face of market competition, leading to a year-on-year decrease in investment income of joint ventures; furthermore, exchange rate fluctuations have brought exchange losses, further squeezing the overall profit margins.”
Despite the net profit loss, GAC Group’s automobile sales volume is on the rise. The announcement stated: “In the first half of the year, the group achieved a car sales volume of 773,100 units, an increase of 2.35% year-on-year, with sales growth outpacing the industry trend.”
The data shows that GAC Group’s situation is not an isolated case, but a true reflection of the entire Chinese automobile market.
GAC Group stated in its “2026 Interim Report”: “In the first half of 2026, China achieved automobile production and sales of 14.993 million units and 15.017 million units, a year-on-year decrease of 4% and 4.1% respectively. Domestic demand has been under significant pressure, with domestic car sales in the first half of the year reaching 9.921 million units, a year-on-year decrease of 21.1%.”
As sales decline, the profits of car manufacturers are also decreasing, falling below the average level of the manufacturing industry. According to a disclosed report on August 11 by Juheng.com, the sales profit margin of China’s automobile industry in the first half of the year was only 3.8%, lower than the average of 6.5% in the upstream and downstream manufacturing industries. High raw material costs, extended payment terms for suppliers, and continuous discounting at the end of the supply chain are all squeezing plant profits.
In the first half of this year, and heading into the second half, the automobile market still shows no signs of improvement.
According to data released by the China Passenger Car Market Information Joint Conference (CPCA) on August 11, retail sales of passenger cars in China in July were 1.46 million units, a decrease of 20.9% compared to the same period last year, and an 8.8% decrease from June. Car sales have been continuously declining since October last year.
CPCA predicts that the passenger car market in China will still be in a bottoming-out phase in August, with seasonal off-season, high oil prices, and weak consumer demand limiting the speed of market recovery.