GAC's Strategic Breakthrough

As 2024 rolls on, the automotive industry is already keen to set ambitious sales targets for the coming year, despite the many challenges that lie aheadRecently, GAC Group made headlines by announcing its sales goals for 2025, aiming for a significant 15% increase in annual salesThis announcement comes at a time when the company contends with a dual decline in sales, both from joint venture brands and its own domestic lines.

GAC Group envisions producing approximately 1.912 million vehicles in 2024, with expected sales hitting around 2.003 millionThese figures are notable as they represent a 20.1% drop compared to previous performanceWhile the prospect of a 15% hike in 2025 sales goals sounds aggressive, a closer look reveals that it might not be as audacious as it initially appears, given the context of the preliminary figures.

In 2023, GAC Group registered total sales of 2.505 million vehiclesWith this backdrop, the company targeted modest sales growth of 10% for 2024, aiming for 2.7555 million units soldHowever, with the current 2024 sales projections at 2.003 million units and a concerning shortfall, they have achieved merely 73% of their targetThe goal for 2025—selling 2.3035 million cars—seems increasingly challenging against the backdrop of an almost 20,000-unit deficit when compared to 2023's totals.

The decline in sales figures predominantly stems from poor performance by GAC's joint ventures, GAC Toyota and GAC Honda, which have faced their challenges this yearGAC Toyota, historically a standout with annual sales exceeding a million units, is now grappling with a continuous fall in sales that began in February of this yearStatistics reveal that GAC Toyota sold only 660,900 units in the first eleven months of the year—a staggering decrease of 22.49% year on yearShould this trend persist, total annual sales could plummet even further.

In response to the dismal sales, GAC Toyota is accelerating its transformation toward new energy, as evidenced by the unveiling of its "Fusion 2030" strategy in November

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The company has set its sights on reclaiming its title among the top brands in the smart electric vehicle age, signifying a push towards innovation in the face of adversity.

GAC Honda, another key player under the GAC umbrella, shows even more alarming figuresWith sales of just 390,700 units over the first eleven months—down 30.38% from 561,100 units last year—it has endured the largest drop among GAC's brandsThe reduction in consumer demand for both joint and domestic brands highlights broader industry challenges, including intense competition and shifting consumer preferences.

Moreover, the decline isn't limited to joint ventures; GAC's domestic brands are facing hurdles as wellIn the same eleven months, GAC's own brand, GAC Trumpchi, recorded sales of 356,500 units—falling 3.95% year on yearThis drop is particularly notable considering the brand's previous growth trajectory over the last three years, which had shown increase rates of over 10%. The current downturn represents a jarring shift in momentum for a brand that once enjoyed steady gains.

GAC Aion, another domestic brand under the GAC umbrella, faced a dramatic decline in sales, reporting only 307,200 units for the first 11 months of the year—a staggering drop of nearly 29.23%. Despite these difficulties, GAC Aion's management expressed a renewed commitment to growth, claiming the brand is on an upward trajectory again.

The fluctuations in sales have undoubtedly placed considerable pressure on GAC Group's overall performanceThe company's financial report for the first three quarters of the fiscal year displayed a troubling revenue of CNY 74.04 billion, marking a 24.18% fall, with net profit plummeting by 97.34% to CNY 120 millionThese figures reflect the challenging landscape GAC navigates amid declining sales.

Acknowledging the difficulties, GAC has implemented reformative measures

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