Trumpchi’s sales decline brings down GAC Group’s first-half revenue

Shanghai (Gasgoo)- GAC Group posted double-digit year-over-year decrease in both first-half revenue and net profit, according to the automaker's interim report. 

For the first six months, the group's revenue amounted to RMB28.123 billion, showing a decrease of 23.38% from the year-ago period mainly due to the prolonged downturn in China's overall auto sales and outputs, domestic policy adjustment and the sales volume decline in its self-owned brand Trumpchi.

Besides, semi-annual net profit attributable to shareholders substantially slid 28.85% to RMB4.919 billion. Basic earnings per share for the reporting period were roughly RMB0.48, down by 29.41% over the year ago period.

GAC Group sold 999,560 vehicles through June with a slight year-on-year drop of 1.69%, outpacing the overall auto market which posted a 12.4% decrease in first-half sales.

Two Sino-Japanese joint ventures—GAC Honda and GAC Toyota—are major sales contributors for the group's stable performance. Both of them obtained double-digit increase in Jan.-Jun. sales volume.

(Photo source: GAC Trumpchi)

The group's wholly-owned GAC Motor attained an impressive growth of 18.92% in June sales after five consecutive months of decline.

Operating costs dipped 10.38% over a year earlier to approximately RMB25.564 billion primarily due to the decrease in production cost caused by sliding sales of self-owned models. However, growth in commercial businesses along with rising sales of joint-venture models correspondingly led a higher marketing cost, which counteracted the production cost decline to some extent.

In addition, R&D expenses jumped 24.43% year over year to RMB2.124 billion.