JINGGUANTAICN ORIGINAL
Text | Hui Pengquan
Recently, GAC Aion's life can be said to be quite uncomfortable.
This company, which was once regarded as the "dark horse" of the new energy vehicle market in 2023, is now caught in the whirlpool of public opinion. was first exposed to a decline in sales and large-scale layoffs, and then appeared on the hot search due to news such as "intensive termination of contracts with fresh graduates", which became the focus of public attention for a while.
In the face of various rumors, GAC Aion reacted quickly. However, although GAC Aion replied to the above rumors one by one, it is an indisputable fact that its sales will decline sharply in 2024 at the moment when the bayonets of new energy vehicles are in the red.
According to the data, from January to May 2024, GAC Aion's sales volume will be less than 110,000 units, a year-on-year decrease of 38.71%, which is far from the annual sales target of 700,000 units. This sharp decline in sales has undoubtedly cast a shadow on GAC Aion's development prospects.
At the same time, GAC Group is also facing a decline in operating income and net profit in the first quarter of 2024.
The unsatisfactory performance not only reflects the decline in the competitiveness of GAC Group in the new energy vehicle market, but also exposes many challenges in the process of its strategic transformation from oil to electricity.
01
Aion is left behind?
An email of "GAC Aion Campus Recruitment Termination Notice" sent GAC Aion to the hot search list.
According to the email, due to the adjustment of the recruitment policy for fresh graduates, the signed tripartite agreement/two-party agreement will be terminated, and 5,000 yuan of liquidated damages will be paid to the terminated person.
However, the disaster is not a single line, just before the news of "intensive termination of the contract with fresh graduates", GAC Aion was also exposed to a decline in sales and large-scale layoffs.
Based on this, busy refuting rumors has become GAC Aion's top priority.
On June 12, GAC Aion immediately issued a statement through the official Weibo to deny all kinds of remarks, and mentioned that in order to protect the legitimate rights and interests of the company, it has officially reported to the public security organs, and will investigate the legal responsibility of the rumor-mongers in accordance with the law.
Source/Aion AION's official Weibo Screenshot of Jingguantai
Subsequently, at the GAC Aion media communication conference on June 13, Gu Huinan, general manager of GAC Aion, responded to the news that "Aion laid off 20%", and revealed, "GAC Aion has a total of more than 7,000 employees, and a 20% layoff is 1,400 people." This year, the company still has several factories to put into production, and 100 directly-operated stores, compared with layoffs, Aion will add 2,000 jobs in the second half of the year. ”
It's just that, even as the official said, it is all false news, and even the recruitment needs to be expanded. However, this new car-making company, which once had the title of "king of online car-hailing", could not respond to the "decline in sales".
According to the production and sales express data released by GAC Group, from January to May this year, the cumulative annual sales of GAC Ai'an were less than 110,000 units, a year-on-year decrease of 38.71%. According to the annual sales target of 700,000 units, GAC Aion has only achieved 14.3% of the annual sales target by the end of May.
Not only is the sales volume of the main brand not as good as before, but the sales performance of its high-end brand Haobo is even less mentionable.
It is reported that as a high-end smart electric vehicle brand under GAC Aion, Haobo has an annual sales target of 50,000 units in 2024. However, after checking Aion's sales reports in recent months, Jingguantai did not see the sales of the Haobo brand.
The decline in sales is also seen by the outside world as one of the main factors for the delay in the progress of GAC Aion's IPO.
At the China Electric Vehicle 100 Forum, when talking about the progress of GAC Aion's IPO, Gu Huinan said: "To be honest, this is not a good time for IPO, the entire capital market is not good, and Aion's process mainly depends on whether the market can recover in the future." ”
In stark contrast, since August 2022, GAC Aion's executives have more than once mentioned in public that "GAC Aion's spin-off and listing work is progressing in an orderly manner as planned".
02
It was once a dark horse of the past
In 2024, it is difficult to see the scenery of Aion, but it is not an exaggeration to describe GAC Aion in 2023 with the four words of "unlimited scenery".
In 2023, GAC Aion achieved annual sales of more than 480,000 units, a year-on-year increase of 77%. Although it did not achieve the target of annual sales of 500,000 yuan, it still became the third largest new energy brand in mainland China and the fastest pure electric vehicle brand in the world to produce and sell more than one million.
To achieve this achievement, GAC Aion has gone for 5 years.
Source/GAC Aion official website Screenshot of the Mirror View Platform
Founded in July 2017, GAC Aion shoulders the important task of developing GAC Group's pure electric new energy vehicle business. According to the official data, as of the end of 2023, GAC Aion did not disappoint GAC Group.
According to the data, from 2019 to 2022, GAC Aion's annual sales were 42,000, 60,000, 123,700 and 271,000 respectively. In 2023, it will soar to 480,000 units, which can be said to be a rapid growth.
It's just that GAC Aion, which has only become an "honor student" in 5 years, has quickly fallen and lost this lead after entering 2024.
The reason for this is that industry analysts generally believe that the reason why GAC Aion was able to quickly climb to the top of the sales list in a short period of time is largely due to its deep cultivation in the online car-hailing market. However, this growth model that relies on the ride-hailing market has also exposed GAC Aion's shortcomings in product diversification and market expansion.
"Despite the impressive sales figures, the 'gold content' of this growth model is not high, that is, it lacks sufficient market competitiveness and brand influence, which ultimately leads to the fading of its 'sales myth'." A senior automotive industry practitioner said.
According to data from CITIC Securities, from 2020 to the first half of 2021, GAC Aion's main model, the AION S, accounted for 60% to 70% of sales in the leasing market, which is much higher than other competitors. This shows that GAC Aion's market performance is largely dependent on the B-end market, rather than the individual consumer market.
In 2023, this dependence is further intensified. According to media statistics, among the 850,000 new online car-hailing cars that year, GAC Aion topped the list with nearly 220,000 sales, accounting for more than a quarter. Especially in Guangdong, GAC Aion occupies almost half of the online car-hailing market, and the concentration of this market share is staggering.
Gu Huinan, general manager of GAC Aion, has publicly stated that "online car-hailing is not synonymous with low-end", and emphasized Aion's warranty commitment of 800,000 kilometers for online car-hailing to prove the high quality of its products. However, changes in the market and intensification of competition have gradually weakened GAC Aion's advantage.
With the saturation of the online car-hailing market and the fierce competition among competitors such as BYD and Geely, GAC Aion's market position has been challenged like never before. Competing models such as the BYD Qin L, BYD Qin PLUS EV, BYD E5, and Geely Emgrand L quickly occupied market share with their excellent performance and cost performance, posing huge pressure on GAC Aion.
Success is also Xiao He, defeat is also Xiao He.
GAC Aion's success in the ride-hailing market has led to rapid growth in sales, but it has also buried the hidden danger of over-reliance on a single market. With the change of the market environment, this dependence has gradually evolved into a "shackle of online car-hailing", which makes GAC Aion passive in the market competition and difficult to extricate itself.
03
GAC's transformation difficulties
GAC Aion's "decline" is not only a single brand sales problem, but also a reflection of the overall dilemma faced by GAC Group in the process of "oil to electricity" strategic transformation.
The difficulty of this transformation can be seen from the slight increase in 2023 to the double decline in performance in the first quarter of 2024.
In 2023, GAC Group will sell a total of 2.505 million vehicles, a year-on-year increase of 2.92%, and sales have been growing positively for three consecutive years, and exceeded the 2.5 million mark for the first time.
But behind this achievement, there is a lack of growth and the hidden worry of transformation. Entering 2024, with the changes in the market environment and the intensification of competition, GAC Group's operating income and net profit both declined, and the company achieved operating income of 21.566 billion yuan, a year-on-year decrease of 18.79%; net profit was 1.220 billion yuan, down 20.65% year-on-year.
At the 2024 China Automobile Chongqing Forum, which opened on June 6, Zeng Qinghong, chairman of Guangzhou Automobile Group, said that the current "involution" phenomenon in the automotive industry is serious, and called for "the automotive industry should adhere to long-termism, avoid falling into endless price wars, and at the same time, when the proportion of pure electric vehicles of new energy vehicles reaches 50%, it should promote the 'same rights of oil and electricity'."
Source/2024 China Automobile Chongqing Forum Screenshot of Jingguantai
This means that in terms of government procurement, car licenses, car purchase restrictions, consumption subsidies, etc., new energy vehicles and traditional fuel vehicles should enjoy the same rights and interests.
As soon as the point of view came out, it caused a huge heated discussion in the industry. What is hidden behind it is not only Zeng Qinghong's criticism of the current "involution" phenomenon in the automotive industry, but also a deep thinking about the future development path of GAC Group.
After all, in addition to the decline in the growth rate of new energy sales, GAC Honda and GAC Toyota, the two major joint venture brands of GAC Group and the "kings" of the era of fuel vehicles, are now also facing a sharp decline in sales.
This change has undoubtedly added more uncertainty to GAC Group's road to "oil to electricity".
According to data from GAC Group, the sales volume of automobiles in May 2024 will be 156518, a year-on-year decrease of 25.33%; From January to May 2024, the cumulative sales volume will be 699529 units, a year-on-year decrease of 24.51%.
Honda and Toyota are both declining. Among them, Guangqi Honda sold 31,931 vehicles in May, a year-on-year decrease of 41.31%; The cumulative sales volume of this year was 173,580 units, a year-on-year decrease of 24.30%. GAC Toyota sold 61,088 vehicles in May, a year-on-year decrease of 17.00%; The cumulative sales volume of this year was 265928 units, a year-on-year decrease of 27.26%.
Just when GAC Group's sales fell to a mess, whether it was traditional manufacturers such as BYD, Changan, and Geely, or new car-making forces such as Ideal, NIO, Zeekr, and Wenjie, the delivery data in May 2024 showed an upward trend.
In this context, GAC Group's road to "oil to electricity" is even more difficult.
How to maintain concentration in the fierce market competition and how to continue to innovate and break through in the rapid development of new energy technology are all issues that GAC needs to think more about.
*The title image is taken from the Mirror Observatory.
*Disclaimer: Under no circumstances does the information or opinions expressed in this article constitute investment advice to any person.