GAC Aion Replies to Shanghai Stock Exchange Regulatory Letter: Declining Revenue, Reduced Profits, and Rising Costs Led to Negative Gross Margin for 2025

People’s Financial News, March 15 — GAC Group (601238) issued a reply announcement regarding the regulatory work letter from the Shanghai Stock Exchange concerning the company’s earnings forecast. The main reasons for the negative gross profit margin in 2025 are: First, a decline in revenue. The company’s自主品牌 passenger vehicle sales decreased by 22.83% year-on-year, coupled with increased terminal promotional expenses, leading to a contraction in the overall vehicle manufacturing revenue scale. This caused the revenue per vehicle to grow far less than the cost increase, squeezing the gross profit margin. Second, a reduction in profit. To counteract the sales decline, the company increased promotional efforts, with自主品牌 average promotional investment per vehicle rising by 5 percentage points compared to last year. However, this did not lead to a sales rebound; instead, the promotional investment could not be offset by scale effects, further compressing profit margins. Third, rising costs. Insufficient capacity utilization pushed up unit fixed costs, with per-vehicle labor costs, depreciation, amortization, and other fixed costs increasing by over 40% year-on-year. Coupled with the potential pressure from high upstream raw material prices, this ultimately drove up the cost per vehicle.