Guanghui Auto Exits New Car Sales, Shifts to Asset-Light Model

Since its delisting from the A-share market in 2024 due to its stock price falling below par value and the subsequent initiation of bankruptcy reorganization, Grand Auto (Guanghui Automotive) has continuously downsized its offline dealership network. Recent reports indicate that the company has completely exited new vehicle sales and shifted its focus to asset-light property management and after-sales operations for existing customers. From 2024 to 2025, China’s retail auto sales exceeded 34 million units, with new energy vehicles (NEVs) accounting for 54.8% of total sales. However, the profitability structure across distribution channels remains severely imbalanced: only 23.5% of dealerships reported profits, while over half operated at a loss. Notably, 81.9% of dealers experienced inverted pricing—where wholesale prices exceeded retail selling prices—forcing the industry to rely heavily on value-added services such as maintenance, used car sales, and auto financing to sustain revenue. During the same period, more than 9,000 4S stores nationwide shut down or withdrew from manufacturer networks, with luxury and joint-venture brand outlets comprising over 60% of closures. Large dealers operating under capital-intensive models faced significantly greater cash flow pressures than smaller regional players, burdened by high inventory levels, rental expenses, and labor costs. Grand Auto had long used its core auto distribution business as an internal funding conduit for other group segments, including energy and logistics. This diverted critical resources during the pivotal transition to NEVs, causing the company to miss key development opportunities. In August 2024, it lost access to low-cost financing after triggering the par-value delisting rule, exposing severe debt liquidity risks. Automakers swiftly revoked brand authorizations, leading to the complete collapse of its core luxury brand sales channels. Starting in 2026, Grand Auto terminated all new vehicle sales and undertook large-scale operational downsizing. The wave of store closures has also triggered consumer protection concerns, with numerous cases reported across regions of unfulfilled after-sales service commitments and related disputes. Industry analysts note that the traditional “scale-first” growth model in auto distribution is no longer sustainable. Only dealers equipped with independent cash flows, sound governance structures, diversified business portfolios, and compliant service capabilities will be able to thrive in the next phase of competition.