GAC Trumpchi's three major new car sales collectively declined, and fuel vehicles carried the banner again, how to achieve the goal of 12 billion million units in two years?

Producer: Sina Finance Listed Company Research Institute

Author: Hao

On April 9, GAC Group disclosed the latest sales data, in the first quarter of this year, the company's cumulative sales were 409,700 units, a year-on-year decrease of 24.11%. Among them, GAC Honda's sales were 117,000 units, a year-on-year decrease of 21.74%, GAC Toyota's sales were 156,100 units, a year-on-year decrease of 29.07%, and GAC Aion's sales were 48,900 units, a year-on-year decrease of 37.60%. Except for GAC Passenger Vehicle, which was basically flat, other brands declined across the board.

At the end of last month, GAC Group also released its 2023 annual report, the company's annual revenue was 129.7 billion yuan, a year-on-year increase of 18%, the net profit attributable to the parent company was 4.43 billion yuan, a year-on-year decrease of 45%, and the non-net profit was 3.57 billion yuan, a year-on-year decrease of 52%, and the performance was halved and lower than the market's previous expectations.

The market has expected the shrinking share of GAC's joint venture brands and the decline of Aion, but compared with the rapid growth of sales of independent brands such as BYD and Geely, GAC Passenger Vehicle is still growing sluggishly from a low base, which is quite disappointing.

In fact, the sales structure of GAC's own brands is even more worrying. In 2023, Trumpchi will launch three new models, E8, E9 and ES9, and sales will collectively decline after launch, with old fuel vehicles such as M6 and GS3 still being the main sales force. What's more, Trumpchi's sales still did not improve after the sharp price cut in March, and even showed signs of decline.

Last year, GAC Group's net profit was cut in half, and its own brands continued to lose more than 5 billion yuan, which was also an important drag factor. In the face of the situation of "Liangtian" and Aion's double decline, GAC Group has high hopes for Trumpchi and has put forward an annual target of 1 million units of its own brand.

However, GAC Passenger Vehicle only completed 85,000 units in the first quarter, and how to balance future sales and performance, Trumpchi is undoubtedly under great pressure.

Weak growth under a low base, sales of new models are collectively declining, and fuel vehicles are carrying the banner again

In the first quarter of this year, GAC Group's sales fell by 24.11% year-on-year, of which GAC Honda, GAC Toyota and GAC Aion fell by 21.74%, 29.07% and 37.60% year-on-year respectively, and only the sales of its own brand GAC passenger cars were basically flat.

In fact, the market has expected the shrinking share of GAC's joint venture brands and the decline of Aion, but GAC's own brand is still growing sluggishly from a low base, which is quite disappointing.

Compared with the year-on-year sales growth of BYD of 13.44% and Geely Automobile's 49% in the first quarter, GAC Passenger Vehicle only grew by 2.25% from a low base last year, and the market performance gap is obvious.

Behind the sluggish sales growth, the sales structure of GAC's own brands is even more worrying.

In 2023, GAC Trumpchi will successively launch three new models, E9, ES9 and E8, to build a new energy product matrix of Trumpchi Zhidian. However, since its launch, sales of the above-mentioned new cars have all declined rapidly.

In May 2023, the GAC Trumpchi E9 was launched, positioned as a high-end plug-in hybrid MPV, with a price of 329,800-389,800 yuan. In the second month after its launch, sales soared to 2,669 units, and then fluctuated lower, leaving a huge gap with competitors such as the Denza D9. In February this year, only 639 units of the E9 were sold, and monthly sales fell below 1,000 units in less than a year after its launch.

In October 2023, the Trumpchi ES9 will be launched, positioned as a medium and large plug-in hybrid SUV, with a guide price of 229,800-269,800 yuan. Coincidentally, it was also the month after its launch that it reached its highest sales of 2,868 units, and has been declining since then. In February this year, ES sales also fell below 1,000 units in September, and only 418 units were sold that month.

A month later, in November, GAC Trumpchi launched the third new car, which is also the second plug-in hybrid MPV E8, with an official guide price of 209,800-229,800 yuan.

As a "matryoshka doll" version of the E9, the E9 has not been recognized by the market, and it seems that the E8 will not be successful. After the second month of its launch, sales of the E8 began to decline, with only 1,280 units sold in February this year.

The newly launched MPV and SUV hybrid models have failed one after another, and GAC Trumpchi can only rely on the old models to support sales.

In the first two months of this year, the Trumpchi M6 launched in January 2019 and the Trumpchi GS3 launched in August 2017 ranked among the top two sales of GAC Trumpchi.

In order to further increase sales, at the beginning of March this year, GAC Trumpchi promoted the above two main sales models again, of which the price of Trumpchi M6 PRO was reduced by 20,000 yuan, with a starting price of 99,800 yuan, and the price of Trumpchi GS3 Shadow Speed was reduced by 16,000 yuan, with a starting price of only 69,800 yuan.

However, even so, Trumpchi's sales have not improved significantly. In March this year, GAC's passenger car sales were 33,200 units, a year-on-year decrease of 5.59%, and sales declined instead of increasing.

How to balance the sales target of independent brands by another 5 billion million units?

At the end of last month, GAC Group disclosed its 2023 annual report, with the company's annual revenue of 129.7 billion yuan, a year-on-year increase of 18%, a net profit attributable to the parent company of 4.43 billion yuan, a year-on-year decrease of 45%, and a non-net profit of 3.57 billion yuan, a year-on-year decrease of 52%.

It is worth noting that in the fourth quarter of last year, GAC Group's single-quarter net profit was -80 million yuan, which has turned from profit to loss, and the non-net profit was -450 million yuan, compared with -230 million yuan in the same period last year, and the loss nearly doubled.

With the deepening of the price war in the industry, the preferential promotions of various car companies continue to increase, and the lack of competitiveness of joint venture brands is highlighted.

In 2023, GAC Honda and GAC Toyota will sell 640,000 and 950,000 units, respectively, down 13.7% and 5.5% year-on-year, respectively, and the two automakers will achieve revenue of 93.53 billion yuan and 152.87 billion yuan, respectively, down 18.8% and 6.5% year-on-year, respectively.

As a result, in 2023, the investment income of GAC Group's associates and joint ventures will be 8.35 billion yuan, a year-on-year decrease of 41.0%.

In addition to joint venture brands, self-owned brands are also an important factor dragging down GAC's performance.

In 2023, GAC Passenger Vehicle will sell 406,500 units, a year-on-year increase of 12.1%, achieve revenue of 57.446 billion yuan, a year-on-year increase of 20.2%, and a net profit of -5.09 billion yuan, although the loss has decreased year-on-year, it is still a huge loss, with a total loss of nearly 12 billion yuan in the past two years.

Entering 2024, the GAC Group announced that it has set a full-year sales target of 2.75 million units, an increase of 10% compared to the actual sales of 2.5 million units last year.

However, since the beginning of this year, not only the sales of "Liangtian" have continued to decline, but Aion's sales have also turned downward, and GAC Group can only pin its hopes on Trumpchi and put forward an annual target of 1 million units of its own brand. However, GAC Passenger Vehicle sold only 85,000 units in the first quarter, with a completion rate of less than 10%.

In the face of huge sales pressure and massive losses, how to balance and balance GAC Trumpchi will undoubtedly become the biggest test in the future.