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Author | Chai Xuchen
Editor | Zhou Zhiyu
Joint venture car companies, which once held absolute discourse power in the Chinese market, are now facing unprecedented pain, with market share continuously being eroded and profits repeatedly shrinking. The previously marginalized independent brands and new forces are stepping into the spotlight, becoming the new protagonists.
Recently, the third-quarter reports of car companies have been released one after another, and several large domestic automotive groups have seen a significant drop in financial data. Among them, SAIC Motor, which once relied on Volkswagen and General Motors for market dominance, and GAC Group, which partnered with the &#34;two small strong&#34; Japanese brands, are experiencing a sharp decline in profits.
The reason lies in the &#34;falling behind&#34; in product strength, development speed, and marketing customer acquisition capabilities, as their joint venture brands' shares are being rapidly seized by the new forces, and the status of the once &#34;profit cash cow&#34; is no longer. At this time, the &#34;new forces&#34; are accelerating their iteration speed to the level of consumer electronics, aiming to push the battlefield towards a conclusion like a whirlwind.
Beneath the surface, a transformation of the era is accelerating, but the joint venture players are unwilling to sink into oblivion; they are adapting to the new rules of the game and starting to race against time. They also deeply realize that in the face of brutal changes and competition, no one can remain at the forefront forever.
<h2>Growing Pains</h2>
This year's traditional harvest season of &#34;Golden September and Silver October&#34; has been a tale of two extremes for car market players, with the automotive giants relying on joint ventures sounding alarm bells internally.
In the third quarter, GAC Group's revenue fell by more than 20%, and along with the sales decline, profits shrank significantly, with a loss of nearly 1.4 billion yuan for the quarter, marking the largest single-quarter loss since its listing in 2010; for the first three quarters of this year, GAC's net profit was only 120 million yuan, a year-on-year decline of 97.34%. If estimated based on the 474,300 units sold during the period, the profit per vehicle is only a few hundred yuan.
Under heavy pressure, GAC Group announced it would relocate its headquarters from Guangzhou's Zhujiang New Town CBD to Panyu to save costs; in fact, rumors of layoffs in GAC's production lines or joint venture brands have been rampant since last year.
As one of the barometers of the Chinese automotive industry, GAC's situation has astonished the industry. This is also a reflection of the survival status of the entire joint venture car companies. In the third quarter of this year, SAIC Motor and CHANGAN AUTOMOBILE also experienced varying degrees of profit decline.
Their performance pressure mainly stems from the decline in market share of fuel vehicles and unprecedentedly fierce price wars.
For instance, GAC also bears the costs of shutting down fuel vehicle production lines. In September, Honda announced the closure of two joint venture production lines in China, including the fourth production line of Guangben, which has an annual production capacity of 50,000 units. The related expenses may reach several hundred million yuan and will be accounted as &#34;one-time expenses&#34; in GAC Group's third-quarter report.
Looking back at the glorious moment six years ago, GAC's annual net profit reached nearly 11 billion yuan, but now this automotive giant's profit is only a fraction of its peak.
In that era dominated by joint venture brands in the fuel vehicle market, BBA stood at the pinnacle, while Volkswagen, Toyota, Ford, General Motors, and others controlled the mainstream market. Independent brands could only occupy a place by heavily relying on price strategies, taking the low-end &#34;alternative&#34; route
This market landscape has been torn apart by the transformation of new energy. The nerves of &#34;old money&#34; are doubly tense, and German and American car companies are also losing sleep, forced to join the price war to maintain their market share, while some dealers are considering withdrawing from the network due to sales difficulties.
Currently, over 60% of GAC's sales still come from Guangfeng and Guangben, two joint venture brands that are suffering severe market blows, experiencing double-digit declines. Among them, Guangben's sales dropped nearly 30% year-on-year to 309,000 vehicles; Guangfeng's sales fell nearly 25% year-on-year to 518,000 vehicles. The situation for SAIC and CHANGAN is similar.
Joint venture brands are no longer the cash cows for these old car companies, and the days of easy profits for the giants are over.
While joint ventures are hindered, the self-owned brands under them have not been able to smoothly take over. In the first nine months, GAC Trumpchi sold 277,000 vehicles, a year-on-year decline of 6.4%; Aion saw a decline of 35% to 226,800 vehicles.
It is not easy for the elephant to turn around, and as the price war intensifies, the product strength gradually shows weakness, forcing large manufacturers trapped in the quagmire of homogenized competition to &#34;exchange price for volume.&#34; However, this is clearly not a long-term solution, as financial reports have already provided the answer.
When the &#34;disappearance of profits&#34; is staged, the cruelty of the car market is more starkly presented to the market, and self-owned brands are accelerating their pace of division. The Passenger Car Association predicts that in October, the market share of self-owned brands in passenger cars will exceed 60%, and Wang Chuanfu boldly stated that in the next 3-5 years, the market share of joint venture brands will shrink to 10%.
Once the absolute protagonists in the market, they are now surrounded by wolves. It seems that the market is temporarily unable to escape the narrative of internal competition, but will the joint venture giants resign themselves to this fate?
<h2>Rebirth</h2>
At present, these once fast-paced leaders have accelerated their pace of introspection and response.
It is worth mentioning that the aforementioned joint venture brands are still thriving in overseas markets. Toyota and Volkswagen, with years of accumulation, remain in the TOP 3 of global automotive companies, with substantial global profits; General Motors, which has fallen in China, is still profiting significantly in markets like North America through pickups and high-displacement premium models.
This means that their predicament focuses on the decoupling from the consumption rhythm of the Chinese market and the loss of speed in the transition to new energy. Cui Dongshu, secretary-general of the Passenger Car Association, believes that international brands need to reposition themselves in China and make effective breakthroughs in technology to change their circumstances.
Jia Jianxu, the newly appointed president of SAIC Motor, emphasized in a recent internal meeting that SAIC must achieve synergy between complete vehicles and parts manufacturers, reducing both visible and invisible costs; some brands need to use profits from gasoline vehicles to subsidize losses in electric vehicle businesses, prioritizing survival before seeking development; joint venture brands need to heavily invest in popular models to regain the confidence of employees, suppliers, and dealers.
Similarly, GAC Group is also planning to increase efficiency. Internally, it has been pointed out to fully learn from BYD and SAIC Group to reduce costs, calling on component companies within the system to first give up profits to ensure the survival of complete vehicles. GAC Honda is closing two production lines for gasoline vehicles while preparing to open a production line for new energy vehicles.
The construction project for Guangben's new energy vehicle production line, with an annual capacity of 120,000 units, is planned to be put into production by the end of the year; its electrification strategy is also accelerating, with its Ye P product series and W pure electric architecture set to debut at the Guangzhou Auto Show
Toyota is also reserving pure electric technology, and after gradually releasing technologies such as all-solid-state batteries, it is expected to unveil its next-generation electric vehicle products in 2026.
With these counterattack plans, after weathering fluctuations, &#34;the two giants&#34; may still have the potential to gather strength for a leap.
It is evident that both major joint venture giants are striving to convey confidence in bottoming out and warming up. However, to regain their former glory, they need the efforts of independent brands to jointly bear the burden with the joint ventures.
&#34;I will personally work with the chairman to coordinate the large passenger vehicle segment, as this is the key to (SAIC Motor)'s success and the only hope.&#34; In an internal meeting, Jia Jianxu urged IM Motors to strengthen its voice and scale, achieving breakthroughs with the assistance of the Audi project.
On the other hand, one of the purposes of GAC Group's relocation of its headquarters is to come to the Panyu Automotive City, where GAC Trumpchi, Aion, and the GAC Research Institute are located, transforming the management model of independent brands from strategic control to operational control. Sources close to GAC pointed out that the group's previous management of independent brands adopted a traditional strategic control model, with relatively separated links in research and development, manufacturing, and sales.
For the joint venture giants, the once bright moments have become a thing of the past, but short-term changes do not represent the industry's endgame, as they still hold many chips.
This painful industry upheaval has already changed the mindset of the big brothers, who are all &#34;bending down&#34; to learn from the new generation, showing greater respect for the market and consumers. This urgent race against time may also endow them with the ability to respond quickly; only by getting used to change can they remain unflustered in the face of adversity.
To survive in the increasingly fierce industry reshuffle, established giants like SAIC, GAC, and CHANGAN AUTOMOBILE must also master the rhythm of their counterattack

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Joint venture car companies are facing unprecedented challenges in the Chinese market, with market share and profits continuing to decline, while domestic brands and new forces are rapidly rising. GAC Group reported a loss of nearly 1.4 billion yuan in the third quarter, marking the largest single-quarter loss since its listing, with net profit down 97.34% year-on-year. SAIC Motor and CHANGAN AUTOMOBILE also experienced profit declines, mainly due to reduced market share of fuel vehicles and intense price wars. Joint venture car companies are striving to adapt to the new competitive environment

- Joint venture car manufacturers in China are facing unprecedented challenges, with market share and profits declining sharply.  
- Major companies like GAC and SAIC report significant financial losses, attributed to lagging product development and fierce competition from emerging domestic brands.  
- In response, these traditional giants are adapting their strategies, focusing on cost reduction and innovation to regain market position amid a rapidly changing automotive landscape.

Joint venture car companies reach a turning point in their fate