Changan Auto Reports Sharp Profit Drop in H1 Amid Strategic Shift to High-Quality Growth

Changan Automobile's earnings forecast for the first half of 2026 indicates that its net profit attributable to shareholders is expected to range between RMB 740 million and RMB 970 million, representing a year-over-year decline of 57.66% to 67.70%. Its net profit after non-recurring gains and losses is projected to be between RMB 230 million and RMB 330 million, down 77.65% to 84.42% year-on-year. At a media briefing on July 16, Tan Benhong, Deputy Party Secretary of Changan Automobile, addressed concerns over the profit decline, stating that the company is currently undergoing a strategic adjustment phase and that sales volume should not be simplistically equated with profitability. Tan noted that as an automaker with annual sales reaching 3 million vehicles, Changan must balance multiple operational factors during this high-level adjustment period, including R&D investment in both fuel-powered and new energy vehicles, as well as exploration of new marketing models. This year, the company has proactively optimized its product portfolio by discontinuing certain less profitable models. Specifically, the adjustment of one low-end model priced below RMB 50,000 led to a sales reduction of approximately 70,000 units. Additionally, Changan has scaled back some fuel-powered models with low profitability and facing emissions compliance pressures. He emphasized that Changan has abandoned the old strategy of "the more products, the better the competitive edge," no longer pursuing pure scale expansion. Instead, the company now prioritizes balancing volume and profitability while focusing on high-quality development, and is cautious about using scale alone to suppress competitors.