GAC's revenue grew in the first quarter, but investments are still increasing.

April 29th in the evening, GAC Group released its financial report for the first quarter of 2026. During the period, GAC Group achieved an operating revenue of 20.039 billion yuan, a slight year-on-year increase of 1.98%; the net loss attributable to shareholders of the parent company was 656 million yuan, narrowing by 10.29% compared to the same period last year. If only viewed on the surface, this data seems to signal a stage of performance stabilization. However, in the current intensely competitive automotive market, GAC Group is still experiencing a painful period of deep transition from old to new drivers, and the internal restructuring of its business segments is far more dramatic than the changes in revenue figures. Breaking down first quarter revenue and sales composition, GAC Group displays a very clear “inverted U-shape” structural reversal: the traditional profit cows, GAC Toyota and GAC Honda, are in periods of strategic contraction and production line adjustments, while its own brands have strongly become growth engines. This rise is reflected not only in the boost of absolute figures but also in its support strength for the overall group. Data shows that in the first quarter, GAC Group's cumulative sales were nearly 380,000 vehicles, with a slight overall increase of 2.38%. Among them, sales of GAC's own brand passenger cars reached 166,200 vehicles, a staggering 42% year-on-year increase. The two major twins of its own brands—GAC Aion and GAC Trumpchi—delivered high growth rates of 57.34% and 33.06%, respectively. The rise of self-owned brands is also accompanied by a strong momentum of external expansion. In the first quarter, GAC's export sales reached 42,200 vehicles, a year-on-year surge of more than 80%. This means that during the gap period of fluctuating profit contributions from joint venture brands, GAC's own brands not only held their ground in the fiercely competitive domestic market, but also found structural incremental space by venturing overseas. The proportion of the self-owned segment within the group is experiencing a historic leap, marking a substantial step for GAC in breaking free from dependency on joint ventures. Against the backdrop of widening losses in its main business, the financial report's most notable data point is the R&D expenses, which increased sharply by 42.06% year-on-year. Choosing to significantly boost R&D during a period of profit pressure is less an act of aggressive expansion and more a defensive action compelled by waves of technological iteration. The competitive logic of the automotive industry has now shifted fundamentally. The focus of competition in the domestic market is shifting rapidly from simple electrification acceleration to deeper evolution of electric drive system efficiency, cross-end ecosystem integration in smart cockpits, and the much sought-after “physical AI” direction for the entire industry. Facing sustained pressure from new players in the intelligent driving field, and comprehensive layouts by automakers like Chery and SAIC in new energy technology stacks, GAC Group must maintain strong capital injections. These surging R&D expenses are the price GAC must pay to secure a seat at the table for next-generation intelligent electric vehicles. If GAC cannot establish a proprietary moat in core technologies such as physical AI and next-generation electronic/electrical architecture, its ambition for upward brand breakthroughs will be unattainable, and the high growth of its own brands will lack long-term technical premium support, risking a quagmire of low-end price wars. Looking ahead, GAC Group faces both an abyss and a springboard; the core of its turnaround is whether it can achieve necessary transformation before its cash flow collapses. The biggest opportunity clearly points to globalization. As the global automotive industry's geopolitical landscape shifts, whether GAC can rapidly convert the relative advantages honed by its own brands in intelligence within China into absolute sales and profit space overseas will be the decisive factor in returning to profitability over the next two years. Overall, GAC Group's first quarter 2026 report showcases the difficult balance of a traditional car enterprise between the collapse of the old order and the establishment of a new system. The slight increase in revenue and sharp rise in R&D investment indicate that management still has the strategic determination to anchor the future with technology, but the expansion of core business losses also sounds an alarm. For GAC, before joint venture profits are completely gone, having its own brands achieve a qualitative leap from scale expansion to high-quality profitability has become a no-retreat, time-limited race. Risk Warning and Disclaimer The market is risky, and investment requires caution. This article does not constitute personal investment advice, nor does it take into account the individual investment goals, financial situation, or needs of specific users. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular situation. Investing accordingly is at your own risk.