China Automakers Warn of Profit Squeeze as Raw Material Costs Rise

Six major automakers in China issued first-half 2026 earnings alerts showing that rising raw material and parts costs are eroding profits, according to Jiemian News. GAC Group expects a net loss attributable to shareholders of 4.06 billion yuan to 4.57 billion yuan, while Changan Automobile forecast profit to fall 57.66% to 67.7% to 740 million yuan to 970 million yuan. Seres expects to swing from a profit a year earlier to a loss of 1.5 billion yuan to 1.8 billion yuan, and BAIC BluePark forecast a loss of 1.77 billion yuan to 1.97 billion yuan. JAC Motors said it expects a loss of about 740 million yuan, while Great Wall Motor also forecast lower first-half net profit. The companies cited higher raw material and component costs, exchange-rate moves, weaker sales, and investment in overseas and self-owned brands as factors behind the weaker results. Jiemian News reported that the increase in storage chip, industrial metal and battery-grade lithium carbonate prices may add at least 4,000 yuan to 7,000 yuan per vehicle, while a luxury-car executive said this year’s raw material increases lifted that company's per-vehicle material cost by about 10,000 yuan. The article said mature storage chip prices have already risen more than 100% in some contracts in the first half, with another 60% to 70% increase possible in the second half. It also noted that GM and Ford signed long-term deals with Micron in July to secure supply, while Nio partnered with and became a strategic investor in Xinchuang Technology for automotive-grade chips. China Passenger Car Association data showed mainland narrow-passenger retail sales fell 20.2% year on year to 8.701 million in the first half of 2026, including 4.704 million new-energy passenger vehicle sales and 3.997 million fuel vehicle sales.