GAC Posts First Annual Loss Since 2010
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Guangzhou Automobile Group Co. Ltd. (GAC) reported its first annual loss since going public in 2010, as the state-owned carmaker grappled with the brutal price war and sluggish sales.
The Hong Kong- and Shanghai-listed company booked a net loss of 8.8 billion yuan ($1.2 billion) in 2025, compared with a profit of 824 million yuan a year earlier, as revenue declined 10.4% year-on-year to 95.7 billion yuan, according to its earnings report released Friday. The financial deterioration rapidly accelerated in the final three months of the year, with a fourth-quarter net loss of 4.5 billion yuan that eclipsed the combined loss of the first three quarters.
The unprecedented earnings collapse underscores the severe financial toll that China’s rapid transition to electric vehicles and merciless price war are taking on legacy automakers long accustomed to a heavy reliance on internal combustion engine vehicles and joint ventures with foreign partners.
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- GAC reported its first annual loss since 2010, posting a net loss of 8.8 billion yuan in 2025 as revenue declined 10.4% to 95.7 billion yuan, with a sharp drop in sales across key proprietary and joint venture brands.
- Gross profit margin switched from a 2,200 yuan profit per vehicle in 2024 to an 8,300 yuan loss in 2025, driven by price wars, increased costs, and asset write-offs.
- Overseas sales grew 48% to 125,000 units in 2025, but cannot yet offset domestic losses; restructuring has begun showing positive early 2026 results.
- Guangzhou Automobile Group Co. Ltd.
- Guangzhou Automobile Group Co. Ltd. (GAC) is a state-owned Chinese automaker, listed in Hong Kong and Shanghai. In 2025, it experienced its first annual net loss since 2010 ($1.2 billion), with revenue declining 10.4%. Sales plummeted 14.1% year-on-year to 1.72 million vehicles. This downturn was largely attributed to a brutal price war and sluggish sales, leading to a negative gross profit margin for its core vehicle manufacturing business.
- Honda Motor Co. Ltd.
- Honda Motor Co. Ltd. partnered with Guangzhou Automobile Group Co. Ltd. (GAC) in a joint venture. In 2025, this joint venture experienced a significant decline, with vehicle sales sliding by 25.2% to 352,000 units, representing the steepest decline among GAC's partnerships.
- Toyota Motor Corp.
- In 2025, while most of GAC's joint ventures and proprietary brands experienced declining sales, the joint venture with Toyota Motor Corp. was a positive outlier. It achieved a 2.4% sales increase, reaching 756,000 units. Additionally, a new-energy model developed by GAC Toyota entered Toyota's global sales system.
- 2010：
- GAC went public.
- 2024：
- GAC reported a net profit of 824 million yuan and a gross profit margin per vehicle of 2,200 yuan.
- October 2024：
- GAC initiated the 'Panyu Action' restructuring plan, relocating its headquarters to the Panyu manufacturing hub and reorganizing operations.
- 2025：
- GAC booked a net loss of 8.8 billion yuan (its first annual loss since going public), as revenue declined 10.4% year-on-year to 95.7 billion yuan. The company's proprietary brands suffered double-digit sales declines; GAC-Honda sales declined 25.2%; GAC-Toyota sales increased 2.4%. Discounts on mainstream models reached five-year highs, and fixed/labor costs per vehicle surged 40%. International operations saw a 48% increase in overseas sales. The gross profit margin per vehicle inverted to an 8,300 yuan loss. GAC logged asset impairments totaling 2.4 billion yuan.
- Final three months of 2025：
- GAC reported a net loss of 4.5 billion yuan in the fourth quarter, which surpassed the combined loss of the first three quarters of the year.
- Friday, March 27, 2026：
- GAC released its earnings report for 2025.
- First two months of 2026：
- GAC sold 203,000 vehicles, achieving a 3% year-on-year increase.
- As of March 2026：
- GAC is considering further asset adjustments and restructuring under the coordination of the Guangzhou municipal state-owned assets regulator.
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