Chery international boss estimates 90 per cent of Chinese carmakers lose money

Chery executive's warning on Chinese industry losses

Chery International president Zhang Guibing has estimated that around 90 per cent of Chinese automakers are losing money, warning that rising development costs will force more companies out of the industry. According to CarExpert, speaking to Australian media in China, Mr Zhang was asked how many manufacturers would survive the current competition and whether Australian buyers could be confident newly arrived brands would still exist in five to 10 years. ¹

"Most Chinese car manufacturers are listed on the stock market and release financial reports. Looking at those reports, I think most of them, maybe around 90 per cent, are losing money," Mr Zhang said, according to CarExpert. "Too many companies, surely later will die, will disappear." ¹

Mr Zhang said the research and development investment needed to keep new vehicles competitive had risen sharply compared with the past, because modern cars involve far more new-technology development than earlier largely mechanical vehicles. Asked whether development costs would eventually ease as technology matured, drawing a comparison with the mobile-phone industry, he said he could not see the same stability in cars, telling the gathered media: "I couldn't understand what will be tomorrow's car, the day after tomorrow's car." ¹

A profitable exception with growing reliance on exports

Chery itself remains profitable. According to CarExpert, Hong Kong-listed Chery Automobile reported a net profit of 9.02 billion yuan — approximately A$1.92 billion — for the first half of 2026, down 9 per cent from a year earlier, a result that included foreign-exchange losses while gross profit increased. Its half-year accounts show research and development expenses rose 28.3 per cent to 6.67 billion yuan, which the company attributed to greater development activity and higher personnel expenses. ¹

Overseas customers accounted for 69.1 per cent of Chery Automobile's revenue in the half-year, compared with 46.3 per cent a year earlier, and the company said higher-margin overseas vehicle sales helped improve its overall gross margin, according to CarExpert's report of the accounts. ¹

Broader industry data reported by CarExpert points to pressure across the sector. A Sohu report cited in its article said the Chinese automotive industry's profit margin fell to 3.2 per cent in the first three months of 2026, and that China manufactured around 35 million vehicles last year against estimated annual production capacity of about 55 million. ¹

Growth continues in Australia

In Australia, the group's sales are still rising. According to CarExpert, Chery recorded 4205 deliveries in September and Omoda Jaecoo reported another 2310, both up on their September 2025 results. The group is also preparing to expand its local brand lineup, with CarExpert reporting that Freelander, iCaur, Jetour and Exlantix are all heading to Australia in 2027, along with Luxeed, which was confirmed this week, and Lepas due before the end of 2026. ¹