Cango Newsletter 20240403

Date: 2024-04-03

Cango Newsletter 20240403


Cango (NYSE: CANG) is a leading automotive transaction service platform in China, connecting dealers, financial institutions, car buyers, and other industry participants. Follow us on Twitter ( for updates.


Below please find our latest Cango newsletter. Our goal is to share the most newsworthy articles in today’s macro economy, auto industry, as well as our recent developments. Below please find the abstract and news link for more details.

Macro Economy

1. SASAC Selects Inaugural Group of “Vanguard Enterprises,” Accelerating Progress in Emerging Industries and Domains

SASAC, the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) of China, has officially unveiled its initial selection of enterprises for its Vanguard Enterprise Incubation Project. With this strategic move, the SASAC aims to drive rapid progress in emerging industries and domains to foster “advanced productivity.” These enterprises, mostly established within the last three years, are concentrated in emerging fields such as artificial intelligence, quantum information, and biomedicine, among others. The SASAC established the Vanguard Enterprise Incubation Project last year to accelerate the cultivation of innovative state-owned enterprises. Focusing on China’s national strategic priorities, emerging industries and future sectors, the project is dedicated to identifying and nurturing a cohort of promising startups with robust fundamentals. This will expedite the establishment of new growth drivers and strengths, ultimately creating future “unicorns” and leading high-tech enterprises. [Link]

2. Policy Initiatives Unveiled Across China to Optimize Business Environment and Boost Private Sector Growth

Since last year, China has effected a wide array of targeted policy measures aimed at promoting the growth and expansion of the private sector. According to data released by the National Bureau of Statistics, in the first two months of 2024, private investment grew 0.4% year-on-year, marking a turnaround from previous declines. More specifically, excluding real estate development, private investment surged by 7.6% year-on-year. Furthermore, private investment in manufacturing soared by 11.6%, outpacing overall manufacturing investment by 2.2 percentage points. Private investment in infrastructure was also up by 7.9%, outpacing overall infrastructure investment by 1.6 percentage points. [Link]

3. Six Chief Economists Forecast 5% GDP Growth in 1Q24 and Potential Upside for 2Q

China’s 2024 Government Work Report calls for a GDP growth rate of around 5%. At the end of the first quarter of 2024, a wealth of economic metrics for the quarter were released. China's economic performance in the initial two months of the year exceeded market expectations. Experts anticipate that first quarter GDP growth will hover around 5%. Zhiheng LUO commented, "In general, key economic indicators spanning consumption, investment, exports, and production from January to February have surpassed market expectations. With GDP expected to climb by 5.5% - 6% year-on-year for the first quarter, we have likely laid a solid foundation for the year ahead." [Link]

Automobile Market

1. Elevated Momentum for Xiaomi SU7 as AITO and Zeekr Vie for Greater Market Share with Price Cuts and Feature Enhancements

Luxeed S7, Tesla Model 3, and Zeekr 007, all BEVs, are among the contenders challenging Xiaomi SU7. Luxeed S7, which is a pure electric sedan like Xiaomi SU7, has started large-scale delivery and plans to be relaunched on April 9. Besides Luxeed, Zeekr is boldly pursuing market share with the official launch of the enhanced rear-wheel drive variant of Zeekr 007, announced on April 1 via the company’s Weibo account. Priced competitively from RMB209,900, Zeekr’s new offering undercuts Xiaomi SU7’s starting price by nearly RMB10,000. Zeekr 007’s advanced features, including smart driver assistance and an impressive range exceeding 800km, make it a fierce market competitor. [Link]

2. Dongfeng Motor Reports First Loss Post-IPO Amidst Slumping Sales of Its JV Brands

Per Dongfeng Motor’s latest financial report, the company generated revenues of RMB99.315 billion in 2023, up 7.2% year-over-year. However, despite this revenue growth, profitability shifted from positive to negative. The company incurred a net loss attributable to shareholders of RMB3.996 billion, a significant decline of RMB14.261 billion from the RMB10.265 billion profit recorded in the previous year. On the sales front, Dongfeng Motor has experienced a five-year consecutive decline in sales volume, plummeting from 3052.2 thousand vehicles in 2018 to 2088.2 thousand vehicles in 2023. Earlier this month, the company cautioned investors of an anticipated net loss attributable to its parent company of nearly RMB4 billion for full year 2023. This unprecedented loss since its IPO is primarily attributed to increased investment in new energy ventures and market pressures impacting its joint venture businesses. [Link]

3. Leapmotor Achieves First Positive Full-Year Gross Profit Margin

According to Leapmotor’s 2023 financial results, the company’s gross profit margin reached 0.5% for the full year. Leapmotor’s Cost Reduction Committee, comprised of employees from diverse departments responsible for technical and business cost reductions, convenes regularly to strategize on cost-saving initiatives, driving profit margin improvement. Leapmotor also asserts that per other emerging automakers’ criteria, after dealer rebate adjustments, its full-year 2023 gross profit margin stands at approximately 11.6%. During an interview with Jiemian News and other media channels, Leapmotor CEO Zhu Jiangming highlighted that the key to delivering a positive gross profit margin for 2023 was the company’s cost reduction strategy, implemented in September 2022. Notably, a substantial reduction in material costs from the second quarter of 2023 contributed significantly to this achievement. Zhu Jiangming also credited Leapmotor's competitive edge in self-developed core components for the rising gross profit margin, propelled by the company’s relentless pursuit of cost reduction. [Link]

For more information, please contact Yihe Liu at