GAC Group sees YoY growth in 2023 revenue, but annual net profit drops

Shanghai (Gasgoo)- GAC Group, one of the major automobile groups in China, disclosed its financial performance for the year of 2023, showcasing a year-on-year growth in revenue, but a plunge in net profit.

During the reporting period, the group's gross operating revenue amounted to around 129.706 billion yuan, marking an increase of about 17.62% compared to the same period last year. However, its annual net profit attributable to shareholders of the parent company plunged 45.08% year on year to about 4.429 billion yuan. Meanwhile, the basic earnings per share stood at approximately 0.42 yuan, declining by about 46.15% over a year earlier.

Photo credit: GAC Group

The group attributed the performance changes to four major factors:

(1) Seizing opportunities amidst industry dynamics

In 2023, China's economy showed steady signs of recovery, with the domestic automotive market experiencing overall stability and growth, reaching historical highs in both production and sales volume. However, challenges such as the subsidy phase-out for new energy vehicles and price reduction frenzy within the automotive industry still existed in this period.

In response, GAC Group strategically aligned itself with China's "14th Five-Year Plan," leveraging favorable policies and market opportunities while actively addressing industry challenges. By focusing on high-quality development, the group achieved a cumulative sales volume of 2.505 million vehicles in 2023, a year-on-year increase of 2.92%.

Emphasizing positive R&D and independent innovation, GAC Group accelerated the introduction of all-new products and refreshed products to enhance its product competitiveness. Notably, GAC Motor expanded its product portfolio with the introduction of new PHEV models, including the Trumpchi E8, E9, ES9, M6, and M8. Additionally, GAC AION sold over 480,000 vehicles for the year, marking a 77.02% surge year-on-year, while advancing the development of its energy ecosystem.

(2) Accelerated product transformation in joint ventures

Joint ventures within GAC Group intensified their product transformation efforts. GAC Toyota introduced new-generation models such as the all-new Levin and the Bozhi 4X, along with various PHEV models. The proportion of new energy vehicle and energy-saving vehicles continued to rise, achieving a combined sales volume of over 950,000 vehicles for the year. Similarly, GAC Honda also launched many new products, including the new-generation ACCORD, the INTEGRA HATCHBACK, the ZR-V e:HEV, and the BREEZE e:HEV/PHEV.

(3) Synergistic development of supporting businesses

Supporting businesses along the industrial chain, such as financial services, automotive components, and trade services, closely aligned with the group's strategic objectives, demonstrating continuous synergy to support the core business. Of them, financial enterprises deepened cooperation and innovation in business expansion, providing strong support for the group's automotive sales. Meanwhile, automotive components and trade services actively responded to the group's globalization strategy, expanding into foreign markets.

(4) Strategic investments and restructuring to navigate market competition

To cope with intense market competition, major subsidiaries within GAC Group increased their investment in commercial businesses. Additionally, the group undertook the restructuring of GAC Mitsubishi, effectively resolving historical issues associated with the subsidiary.