AutoBeta(AutoBeta.net)08/26 Report--

On the evening of August 25th, GAC GROUP released his 2023 interim performance report. According to the financial report, the group's operating income in the first half of the year was 61.911 billion yuan, an increase of 27.16% over the same period last year; the net profit belonging to shareholders of listed companies was 2.966 billion yuan, down 48.42% from the same period last year; and the net profit belonging to shareholders of listed companies after deducting non-recurring profits and losses was 2.703 billion yuan, down 52.09% from the same period last year.

The overall performance of the joint venture brand is lower than the market level, which directly affects GAC GROUP's profit performance, which is also the main reason why GAC GROUP does not increase profits. GAC GROUP did not give a specific reason for the decline in net profit, but it is not difficult to analyze that the joint venture brand is mainly a drag on GAC GROUP's overall performance. GAC GROUP said in the financial report that "the investment income of the Group during the reporting period was about 5.448 billion yuan, a decrease of about 3.05 billion yuan over the same period last year, mainly due to the decline in the profits of Japanese joint ventures."

According to the financial report, GAC GROUP sold 1.163 million cars in the first half of 2023, up 1.14 percent from the same period last year, of which 236000 new energy vehicles were sold, up 108.52 percent from the same period last year. In other words, GAC GROUP's sales growth mainly depends on new energy vehicles, which mainly come from GAC Ian.

In terms of specific brands, among the joint venture brands, GAC Honda sold 289900 vehicles in the first half of the year, down 18.89% from the same period last year, while GAC Toyota sold 452800 vehicles, down 9.48% from the same period last year. Among independent brands, GAC MOTOR sold 188100 vehicles, up 8.97 per cent from the same period last year, while GAC Ean sold 209300 vehicles, up 108.81 per cent from the same period last year.

According to Automotive Industry concern, GAC Toyota and GAC Honda accounted for 63.86% of the group's total sales, while GAC MOTOR and GAC Ean accounted for only 34.17%. In other words, the joint venture brand is still the main source of sales of GAC GROUP, and the performance of the joint venture brand will directly affect the performance of GAC GROUP, but the future growth driving force will come from the independent brand. Although the sales volume of GAC MOTOR + GAC Ean is far lower than that of the joint venture brand, it has achieved year-on-year growth.

Where is the way of joint venture brand?

As a member of GAC GROUP's joint venture brand, GAC-Mitsubishi was the first to get into trouble. The financial report shows that as of June 30, 2023, GAC-Mitsubishi has total assets of 4.325 billion yuan, total liabilities of 5.74 billion yuan and net assets of-1.415 billion yuan, which is insolvent.

On July 13, GAC-Mitsubishi issued an internal letter admitting publicly that the company had to enter a temporary suspension of production and optimize its personnel structure, that is, layoffs, because sales fell far short of expectations. Earlier, GAC-Mitsubishi had disappeared from the group's production and marketing KuaiBao, and its sales were included in the "other" because "the proportion of sales is too small to be listed separately."

In addition to GAC-Mitsubishi, GAC Fick also announced the termination of domestic production due to low sales and insolvent assets, and the Jeep brand will be fully converted into an imported brand. At present, matters related to the bankruptcy of Guangzhou Auto Fick are being promoted in accordance with legal procedures. As for Guangzhou Auto Toyota and Guangzhou Auto Honda, their performance in the first half of the year was not satisfactory, especially Guangzhou Auto Honda, which has fallen out of the top 10 passenger car companies in China for many months.

Earlier, GAC GROUP set a target of "challenging 10 per cent year-on-year growth in car sales in 2023" in his 2022 earnings report, with a view to maintaining above-average growth in the industry. It is understood that GAC GROUP sold 2.4338 million vehicles in 2022, up 10% from the same period last year to 2.6818 million vehicles in 2023, while GAC GROUP sold 1.163 million vehicles in the first half of the year, with a target completion rate of 43%. Of course, with the exception of GAC GROUP, most domestic car companies have failed to achieve "more than half the time and more than half the sales", including BYD.

For GAC GROUP, if you want to achieve the sales target, you must rely on your own brand. The new energy vehicles represented by GAC Ean have a rapid momentum, and the growth rate of sales is much better than that of the industry. In the first half of the year, domestic sales of new energy vehicles were 3.747 million, up 44.1% from the same period last year, while GAC NE sold 236000 vehicles, up 108.52% from the same period last year, accounting for 20.29% of the group's total sales. GAC Aian sold 209300 vehicles, an increase of 108.81% over the same period last year.

According to CAAC data, the AION S sold the most in the first half of 2023, with 96005 vehicles, which is also the main model that GAC Ean put into the online car-hailing market, followed by AION Y, with 88243 vehicles.

GAC's Aian sales growth is inseparable from the ride-hailing market, and about 30% of its sales come from ride-hailing. Xiao Yong, deputy general manager of GAC Ean brand, said in an interview, "Ian will not give up the ride-hailing market." If you let Model 3 go for a ride-hailing, he may get down in three months. Let's not get caught up in a misunderstanding. When it comes to ride-hailing, it feels like you can't get on the stage, and it's not something that can be said or done. I don't think so. If a brand says that it can sell 30,000 online car-hailing units a month, I will write a letter of praise to him! "

GAC GROUP is not alone. It reflects the current "dilemma" of joint venture brands in the Chinese auto market, including Changan Ford and Changan Mazda, which belong to Changan Automobile Group, SAIC Volkswagen and SAIC GM, and Dongfeng Nissan, Dongfeng Honda and DPCA, which belong to Dongfeng Automobile Group. The performance in 2023 is not very good.

The decline of joint venture brands and the head-on catch-up of independent brands have become the truest portrayal of China's automobile market, and it also reveals the awkward position of joint venture brands in the domestic market. Previously, joint venture brands have dominated the Chinese auto market for more than 20 years, and Chinese auto brands have no choice, but now independent brands have gradually become the target of global auto companies. Toyota + BYD, Volkswagen + Xiaopeng, Ford + Changan, Jetta + Zero, there may be more and more examples in the future.

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