Shares in the Shanghai-based company fell 10 percent, the daily trading limit, to close at 0.87 yuan (12 U.S. cents) on Tuesday. This marks the 19th consecutive trading day that Grand Automotive shares have fallen below the 1 yuan benchmark.
Even if it rises by 10 percent on Wednesday, the daily trading limit, it is unlikely to breach the 1 yuan level. Under exchange rules, if a stock falls below its par value of 1 yuan for 20 consecutive days, it will be halted from trading and delisted.
Grand Automotive becomes the second car dealer to be delisted from the stock exchange in about a year, after Panda Automobile Trade was delisted in June 2023.
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“Overtaking at the curve”: How China’s EV industry is dominating the global market
“Overtaking at the curve”: How China’s EV industry is dominating the global market
The company sells luxury vehicles under brands such as BMW, Audi and Volvo through more than 730 dealerships nationwide.
Grand Automotive, a unit of Xinjiang Guanghui Industrial Investment Group, reported delivering 713,500 vehicles and earning 138 billion yuan in 2023, making it the second-largest automaker in terms of sales after Zhongsheng Group Holdings.
The car dealership posted a net profit of 392 million yuan last year, improving from a net loss of 2.66 billion yuan in 2022.
As of Tuesday, Grand Automotive was valued at 7.2 billion yuan, based on a closing price of 0.87 yuan.
China’s overcapacity-plagued auto industry faces an uphill battle to improve profitability amid intensifying price competition.
Cui Dongshu, secretary-general of the China Passenger Car Association, said in February that most mainland Chinese automakers were likely to continue cutting prices to maintain market share.
