In its quest for breakthrough and renaissance, GAC Group is steadily carving out a new development trajectory through strategic measures such as fostering independent innovation, achieving joint venture milestones, and expanding overseas. The clarion call for the 'Panyu Action' has resounded loudly.

On February 4, 2025, an announcement by GAC Group created ripples across the automotive industry, much like a stone thrown into a tranquil lake. Zeng Qinghong, a seasoned veteran deeply rooted in GAC Group for many years, stepped down from key positions, including Chairman, due to reaching retirement age, officially bidding adieu to the stage where he had labored diligently for decades. The GAC Group Board of Directors elected Feng Xingya as the new Chairman.

Glory and Foundation: Zeng Qinghong's Years at GAC

For a brief moment, the eyes of the industry and beyond were riveted on the personnel changes, prompting reflections on Zeng Qinghong's illustrious years at GAC.

Since joining Guangzhou Automobile Repair Factory, a subsidiary of GAC Group, in late 1978, Zeng Qinghong's career has been inextricably linked with GAC. Rising through the ranks from the grassroots, he held numerous pivotal positions: in 1999, amid a crisis, he was appointed as Party Secretary, Director, and Executive Deputy General Manager of Guangqi Honda Automobile Co., Ltd., making significant contributions in the realm of joint ventures and cooperation, helping Guangqi Honda emerge prominently in the domestic automotive market; in June 2005, Zeng Qinghong transitioned from Guangqi Honda to serve as Vice Chairman and General Manager of GAC Group, tasked with spearheading the company's shareholding system reform and the development of independent brands; in September 2016, Zeng Qinghong officially took the helm of GAC Group as Chairman and Party Secretary, marking the inception of a crucial phase in comprehensively guiding GAC's development.

Over the past eight years, Zeng Qinghong has led GAC Group to attain three 'leading positions'.

First, Leading in Transformation and Upgrading: In April 2017, in line with the national automobile development strategy, GAC Group, with a forward-looking vision, vigorously promoted the approval and construction of the GAC Intelligent Networked New Energy Automobile Industrial Park; in 2018, the GAC AION Smart Eco-factory was completed and recognized as a lighthouse factory for new energy vehicles by the World Economic Forum (WEF) for its advanced intelligence and digitization levels.

As the core carrier for GAC Group's development of intelligent connected new energy vehicles, GAC AION has achieved high-quality growth since its inception in 2017, with sales reaching 480,000 units in 2023, hitting the milestone of cumulative production and sales of one million units in just four years and eight months. It has emerged as a model for traditional automobile groups transitioning to electrification.

Second, Leading in Technological Innovation: Focusing on strategic emerging industries and crucial technical domains of future industries such as 'dual carbon' new energy, intelligent connectivity, and low-altitude economic three-dimensional travel, GAC Group continually tackles key core technology research and development and intensifies efforts in forward-looking technological innovation.

By the end of 2024, GAC Group had cumulatively invested 50 billion yuan in research and development, fostering an international R&D team of nearly 6,000 individuals and establishing a global R&D network spanning 'three countries and five locations'; its R&D efficiency ranks among the top of independent brands.

In core areas such as energy and power, intelligent connectivity, and others, GAC Group has mastered a suite of industry-leading core technologies, including a hybrid engine with a maximum effective thermal efficiency exceeding 44.14%, the global launch of a complete vehicle equipped with a hydrogen-electric hybrid system, the world's first ammonia engine for passenger vehicles, graphene-based super-fast charging technology, sponge silicon anode battery technology with a range of up to 1,000 kilometers, cartridge battery system safety technology, quark electric drive, self-developed 'multi-sensor fusion' and 'mapless pure vision' autonomous driving technology, etc. By enhancing independent R&D and external collaboration, GAC possesses technical R&D and application capabilities from L2 to L4 in autonomous driving, becoming one of the first domestic automakers approved to conduct pilot tests of L3 autonomous driving on roads.

In terms of forward-looking technology, GAC Group has also recently announced a series of groundbreaking achievements and actively deployed in the low-altitude economy and humanoid robots. At the 2024 GAC Tech Day, it unveiled solid-state battery technology. Towards the end of the year, it released the flying car brand Gaoyu and its first composite-wing flying car Govy AirJet, along with the third-generation embodied intelligent humanoid robot GoMate.

Third, Leading in Institutional and Mechanism Reforms: Since taking office, Zeng Qinghong has spearheaded GAC Group's efforts to vigorously promote innovative changes in the management system and mechanism of state-owned enterprises, helping GAC to embody 'the platform of a state-owned enterprise, the process of a joint venture, and the efficiency of a private enterprise'. Concurrently, GAC has also actively explored and promoted market-oriented recruitment, professional managers, mixed ownership, employee stock ownership, and other initiatives, stimulating market vitality, talent enthusiasm, and initiative through institutional and mechanism innovation. In 2021, GAC Group was selected as one of the first batch of enterprises in the State Council's 'Double Hundred Action' for state-owned enterprise reform, becoming a pacesetter in this field. Just 15 days before Zeng Qinghong's departure on January 15, 2025, GAC Group announced that it would further promote competitive employment among group management cadres and fully implement a term system and contractual management.

Starting from a debt of 3 billion yuan, GAC Group has soared to a peak ranking of 165th on the Fortune Global 500 list; from annual production and sales of less than 10,000 units and operating revenue of only 1.154 billion yuan in its early stages, to annual production and sales of over 2.5 million units and a total operating revenue of 502.3 billion yuan in 2023... Zeng Qinghong's contributions to GAC Group extend beyond short-term performance growth, laying a solid foundation for GAC Group's long-term development and gradually transforming GAC from a regional automobile enterprise into a large automobile group with extensive influence.

Feng Xingya Takes Over: A New Journey Filled with Challenges

However, in 2024, GAC Group encountered unprecedented difficulties. The 2024 annual performance forecast announcement by GAC Group revealed that GAC Group sold 2.003 million vehicles in 2024, a decrease of 20.04% compared to 2.505 million vehicles in 2023; it is anticipated to achieve a net profit attributable to the parent company owner of 800 million to 1.2 billion yuan in 2024, a year-on-year decrease of 72.91% to 81.94%.

The announcement cited two primary reasons for the decline in GAC's business. First, impacted by factors such as price competition in the automotive industry and drastic changes in the competitive landscape, vehicle sales decreased; simultaneously, in response to market competition, the company and its invested enterprises invested approximately 18 billion yuan in additional sales subsidies and other business policies, collectively leading to a year-on-year decrease in net profit attributable to the parent company owner during the reporting period. Second, during the reporting period, the transfer of partial equity in joint-stock companies, changes in equity transfer gains and the valuation of joint-stock companies, as well as government subsidies received, resulted in a year-on-year increase in non-recurring profits and losses during the reporting period.

Specifically, fierce competition in the external environment is one of the pivotal reasons for this dilemma. In 2024, competition in the Chinese automobile market intensified, with numerous automakers striving hard, and the battle for market share was exceptionally fierce. Notably, the rapid rise of new energy vehicles has had a significant impact on the traditional fuel vehicle market. New entrants and traditional automakers that have swiftly transformed have swiftly captured market share with robust market promotion capabilities, exerting immense competitive pressure on GAC Group.

Within the independent brand camp, the 'twin stars' of GAC Trumpchi and GAC AION failed to carry the banner of growth. In 2024, although GAC Trumpchi achieved a year-on-year sales growth of nearly 2%, against the backdrop of the booming new energy vehicle market, this growth rate appears relatively subdued compared to the rapid expansion of new energy vehicles by BYD, Chery, Geely, and other independent brands.

This is primarily because GAC Trumpchi's focus remains on traditional fuel vehicles, and its pace in the wave of new energy transformation is slightly sluggish; additionally, its excessive concentration in the MPV segment limits the brand's expansion into other segments, making it difficult to meet the current diversified market demand.

Although GAC AION embarked on the new energy frontier early and boasts a large user base, the proportion of B-end users is relatively high, the low-end market share is substantial, and user stability is poor. Any minor fluctuation in the market can affect sales. After several years of rapid growth, GAC AION encountered a growth bottleneck in 2024, with annual sales reaching 374,900 units, a year-on-year decrease of 21.9%.

The high-end brand Hyperion faces the challenge of large fluctuations in terminal prices and has yet to forge a clear differentiated advantage in market promotion and product positioning. Compared to high-end new energy brands such as Tesla and NIO, there is a certain gap in brand awareness, impacting the brand's long-term development and high-end image building.

In the joint venture sector, Japanese automakers, once renowned for their stable sales, have entered a period of distress. In 2024, sales of Guangqi Honda were 470,600 units, a year-on-year decrease of 26.52%; sales of Guangqi Toyota were 738,000 units, a year-on-year decrease of 22.32%. The once 'cash cow' is now under significant pressure. In terms of new energy transformation, new energy models such as Guangqi Honda's e:NP1 and e:NP2 sold only 4,509 units throughout the year, receiving a lukewarm market response.

Moreover, accelerating the pace of internationalization is also imperative. In the 'Trillion GAC' strategy, the overseas market is a crucial incremental sector for GAC Group. In 2024, GAC Group exported 127,000 vehicles, a year-on-year increase of 67.6%. While it has made strides in internationalization in recent years, the gap with competitors is evident. For instance, in 2024, Chery Automobile exported 1.144 million vehicles, SAIC Motor exported 929,000 vehicles, Changan Automobile exported 536,000 vehicles, Geely Automobile exported 532,000 vehicles, and Great Wall Motor exported 453,000 vehicles. How to gain a foothold and expand share in overseas markets is another major hurdle facing GAC Group.

At such a pivotal juncture, Feng Xingya, who has assumed the responsibility of Chairman, undoubtedly shoulders the historical mission of steering GAC Group out of its predicament and achieving transformation and upgrading. In fact, GAC Group has already embarked on the path to breaking the deadlock.

Strategy for Breaking the Deadlock: The Password to GAC's Rebirth

At the 2024 Guangzhou International Automobile Exhibition, GAC Group officially announced the launch of the 'Panyu Action', marking the commencement of GAC Group's in-depth reforms over the next three years. In this round of reforms, independent brands have been established as the core driving force for GAC's future development, carrying the ambitious objective of achieving annual sales of 2 million units by 2027. The crux of the 'Panyu Action' lies in deepening and reinforcing GAC's 'Big Independent Brand Strategy' through a series of organizational restructuring and adjustments.

To facilitate the concentration of all elements towards front-line operations and provide robust organizational guarantees for the operational control management model, GAC Group headquarters relocated to Panyu Automobile City. Consequently, GAC Group's independent brand management model has shifted from strategic control to operational control, with front-line command and unified operations. It will closely coordinate with GAC Trumpchi, GAC AION, GAC Research Institute, GAC International, and other enterprises, deeply integrating and advancing the reform process of research, production, and sales integration, establishing an efficient and flexible market-oriented mechanism and organizational system, further reducing operating costs, and enhancing management efficiency. Simultaneously, it integrates the product, procurement, finance, and marketing domains of the independent brand sector, establishing the Product Headquarters, Procurement Headquarters, Finance Headquarters, and Brand Marketing Headquarters, which encompasses the Trumpchi Marketing Headquarters, AION Marketing Headquarters, and Hyperion Marketing Headquarters.

It is reported that in the next three years, GAC's independent brands are anticipated to launch 22 new models, with 7 to be introduced in 2025, encompassing all mainstream new energy power structures such as EV, PHEV, and REV.

In a bid to revitalize its joint venture brands, Guangqi Toyota unveiled the 'Fusion 2030' strategy on the eve of the 2024 Guangzhou Auto Show. This strategy aims to propel the company towards becoming 'Technology Guangqi', with the ambition to once again achieve annual production and sales of one million units, solidifying its position as a leading brand in the era of intelligent electrification. Guangqi Toyota will comprehensively construct a modern product development system, seamlessly integrate into China's intelligent technology ecosystem, embrace China's supply chain, and leverage Chinese ingenuity to fully empower product research and development. Regarding electrification, Guangqi Toyota boasts a comprehensive layout with five major technology lines progressing in tandem, introducing an average of two new models annually in the future. The introduction of the Platinum Wisdom 3X marks a significant milestone for Guangqi Toyota in the realm of new energy.

Guangqi Honda has renewed its commitment to electrification by unveiling the '1113' strategic layout, comprising one brand-new electric vehicle brand, one brand-new electric vehicle factory, one locally developed model for pure electric vehicles, and more than three brand-new electric vehicle models. Simultaneously, the Ye P7 mass production version, the latest testament to Guangqi Honda's advancements in intelligence and electrification, made its debut, officially heralding Guangqi Honda's entry into a new era of new energy and intelligent electrification.

The third challenge for GAC Group lies in accelerating its internationalization efforts. To this end, GAC Group formulated the '1551' internationalization strategy in 2023, guided by the ambition of reaching '500,000 units by 2030'. This strategy involves establishing a presence in five major overseas markets—Europe, Asia-Pacific, the Commonwealth of Independent States, the Middle East and Africa, and Central and South America—and deeply cultivating at least 12 strategic markets with sales exceeding 10,000 units. Over the next 5-10 years, GAC's international business will focus on implementing a global organization and talent guarantee mechanism, centered around the 'five transformations' of brand internationalization, product globalization, production localization, comprehensive sales and service, and ecological diversification, to foster a community for overseas business development.

In March 2024, GAC Group announced its overseas brand strategy, 'One GAC Leading, Twin Stars Driving', emphasizing 'quality leadership' and 'technological innovation'. Later that year, in October, GAC showcased multiple star models at the Paris International Motor Show and unveiled the 'European Market Plan', marking a new chapter in its European expansion. By the end of 2024, GAC Group's products had reached 74 countries and regions, initially establishing a global sales and service network.

2025 serves as the culmination of the 14th Five-Year Plan and the inaugural year for the implementation and effectiveness of GAC Group's three-year 'Panyu Action'. The clarion call for 'Panyu Action' has resonated: on January 6, 2025, the first vehicle of the initiative—the AION UT—was officially launched; on January 10, the 'Proposal on the GH Project' was approved, paving the way for GAC Group to collaborate with Huawei to introduce a series of intelligent new vehicle models; on January 11, GAC Group's IPD (Integrated Product Development Process) and digital transformation project kicked off; and on January 13, at the 2025 GAC Group Hyperion·Trumpchi·AION dealer partner conference, the three brands convened historically to renew their brand positioning. On its path towards breakthrough and rebirth, GAC Group is progressively forging a new trajectory tailored to its own development through strategic initiatives such as independent innovation, joint venture advancements, and overseas expansion.