Changan Auto Q1 2026 Net Profit Plummets 74.09% Amid Declines in Sales and Key Financial Metrics

Changan Automobile reported revenue of RMB 32.706 billion for the first quarter of 2026, down 4.26% year-over-year (YoY). Net profit attributable to shareholders of the listed company stood at RMB 3.51 billion, a sharp decline of 74.09% YoY. Net profit after adjusting for non-recurring gains and losses was RMB 2.42 billion, down 69.06% YoY. Basic earnings per share (EPS) came in at RMB 0.04, a 71.43% decrease YoY. The company attributed the significant drop in net profit primarily to high foreign exchange gains from currency fluctuations in the same period last year. During the same period, management expenses totaled approximately RMB 7 billion, down 31.8% YoY, mainly due to reduced labor costs. Financial expenses amounted to RMB 3.14 billion, compared with a negative RMB 10.74 billion in the same period of 2025, representing a 129.26% YoY increase, primarily driven by lower foreign exchange gains. Other income reached RMB 1.87 billion, down 53.6% YoY, due to decreased government subsidies. From January to March 2026, Changan Automobile sold a total of 557,500 vehicles, down 20.94% YoY. Among these, sales of its self-owned brands totaled 458,300 units, down 25% YoY; new energy vehicle (NEV) sales reached 168,600 units, down 13.16% YoY. For the full year of 2025, Changan Automobile recorded revenue of RMB 164 billion, up 2.67% YoY. Net profit attributable to shareholders of the listed company was RMB 40.75 billion, down 44.34% YoY, while adjusted net profit was RMB 27.95 billion, up 8.03% YoY. Total annual sales reached 2.913 million units—the highest in nearly nine years—of which NEV sales hit 1.109 million units, up 51% YoY, and overseas sales reached 637,000 units, up 18.9% YoY. According to its strategic plan, Changan aims for total sales of 3.3 million vehicles in 2026, including 1.4 million NEVs (representing a penetration rate of no less than 40%), and an overseas sales target of 750,000 units. The company has unveiled its “1445” strategy, targeting over 5 million annual sales by 2030 and entry into the top 10 global automotive brands. Currently, Changan is advancing comprehensive strategic synergy between its Avatr and Deepal brands—maintaining independent front-end operations while deeply integrating mid- and back-end functions in R&D, supply chain, manufacturing, and core component procurement—to build a premium and mid-to-high-end brand cluster capable of exceeding 1.5 million annual sales, with overseas sales accounting for more than 40%. Avatr, established in 2018 and jointly backed by Changan Automobile, Huawei, and CATL, is majority-owned by Changan, with CATL as the second-largest shareholder. In February 2025, Avatr acquired a 10% stake in Huawei’s Yinwang Company for RMB 11.5 billion, with both parties committing to co-create in areas such as vehicle definition, development and testing, and marketing. Avatr began deliveries in December 2022, delivering 20,021 units in 2023 and 61,588 units in 2024; its 2025 sales surpassed 120,000 units. At the end of November 2024, Avatr filed for an IPO on the Hong Kong Stock Exchange. Its revenue for 2022–2024 was RMB 28.34 million, RMB 56.45 billion, and RMB 151.95 billion, respectively, with corresponding net losses of RMB 20.15 billion, RMB 36.93 billion, and RMB 40.18 billion. The company stated that the strategic synergy will not affect its Hong Kong listing plans. Deepal, one of Changan’s three passenger vehicle brands, originated as Chongqing Changan New Energy Automobile Technology Co., Ltd., founded in May 2018. In December 2024, Changan announced plans to inject up to RMB 3.122 billion into Deepal, bringing the total fundraising amount to approximately RMB 6.122 billion. Deepal reported revenue of RMB 37.225 billion in 2024 and RMB 20.654 billion in the first half of 2025, with net losses of RMB 15.72 billion and RMB 5.53 billion, respectively. In 2025, Deepal delivered over 333,000 vehicles, up 36.6% YoY, though it fell short of its revised annual target of 360,000 units. Avatr also missed its 220,000-unit target for 2025.