Source: BohuFN

Recently, GAC Group (hereinafter referred to as "GAC") has been at the forefront of public attention. In April, GAC Group released its first-quarter report, with both revenue and net profit down approximately 20% year-on-year. Looking at the 2023 annual financial report released at the end of March, the performance is also worrying, with net profit down 45.08% year-on-year, indicating a significant decline in profitability.

Behind the decline in performance lies the predicament of GAC being besieged by new energy vehicle brands. In the first five months of this year, GAC's total sales reached 699,500 vehicles, down 24.51% year-on-year. Among them, the sales of the group's new energy vehicles reached 131,600 vehicles, down 28.38% year-on-year.

At the beginning of this year, Zeng Qinghong, Chairman of GAC Group, set a target of challenging a 10% increase in sales in 2024, but so far, GAC is still far from achieving that goal.

No wonder that at the 2024 China Automotive Chongqing Forum held in June this year, Zeng Qinghong directly stated that "internal competition is not a solution." He believes that continuing the industry's internal competition is not a way out, as there is no money to make and no efficiency, and enterprises cannot survive.

However, the problem is that GAC cannot find a way out in the automotive price war, but some other automotive companies can thrive in the price war. In the face of corporate interests, it seems that Zeng Qinghong's words alone are not very effective. Exploring the transformation path of traditional automotive companies in the new energy era is the most urgent issue that GAC needs to address at present.

01 Zeng Qinghong calls for "stopping the internal competition," already "bloodied"

In fact, the current "fierce competition" in the automotive industry is visible to the naked eye, which has also become a hotly debated topic among automotive industry leaders at the 2024 China Automotive Chongqing Forum.

For example, Wang Chuanfu, Chairman of BYD, believes that "internal competition" is a manifestation of market competition, and (automotive companies) can only succeed by actively embracing it. Zhu Huarong, Chairman of Changan Automobile, also believes that "internal competition" is the best way for the industry to quickly return to healthy competition, with good money driving out bad.

Compared to the "internal competition faction," GAC Group is a member of the "anti-competition" faction. Zeng Qinghong believes that continuing the internal competition in the automotive industry is not a solution, as the purpose of a company is to make a profit and contribute to the country, and the automotive industry should also have a long-term strategic vision.

In May this year, Zeng Qinghong also pointed out the industry's pain points at the GAC Group shareholder meeting, stating that "the price war has led to bloodshed, but we have to fight, because if you don't fight, people won't buy, and excessive price competition doesn't bring in money."

However, Zeng Qinghong's sharp remarks are not the first time. At the 2022 World Battery Conference, he once直言, "The cost of batteries has accounted for 40% to 60% of the cost of cars, and (GAC) is now working for CATL (Contemporary Amperex Technology Co., Limited)."

Who could have imagined that such an outspoken entrepreneur is actually a post-60s generation who should have retired already. Zeng Qinghong's original term ended at the end of 2021, but as GAC was in the midst of a new energy transition, coupled with his