20231027-招银国际-Strong_4Q23_sales_mixed_with_rising_competition_23页_1mb

Market Overview: China's auto sector shows strong performance with passenger vehicle (PV) retail and wholesale volumes increasing year-over-year and month-over-month. NEV (New Energy Vehicle) sales grew 39% YoY in the first nine months of 2023, contributing significantly to overall industry growth.

Major Companies:

• Great Wall Motor: Wholesales rose 30% YoY, driven by exports and new model launches. NEV market share declined to 21% in September.
• Geely: Wholesales increased 31% YoY, with Zeekr maintaining steady sales despite intensified competition.
• BYD: Leading in NEV sales, achieving records in both domestic and international markets. Discounts widened due to competitive pressures.
• GAC Group: Aion brand saw its highest ever monthly sales, but overall GAC performance was mixed amid discount increases.

NEV Segment: NEV market share is rising sequentially, expected to approach 40% in 2024. Tesla and BYD lead sales, but Chinese brands are catching up. Exports surged 119% YoY, with Tesla and BYD being top contributors.

City Tier Analysis: NEV penetration varies by city tier, with lower tiers outperforming higher tiers in YoY growth. Tier-4 and below cities saw a 13% MoM rise in NEV sales volume.

Chinese Brands: Market share reached 47.7% in the trailing 12 months, particularly strong in NEVs. Discounts remain low for BYD but are increasing for traditional luxury brands.

Key Indicators: NEV leading indicators suggest strong potential for 4Q23, with Tesla and BYD driving sales. Dealer inventories are at 1.8-1.9 months, indicating readiness for peak season demand.

Outlook: 4Q23 is expected to be the best quarter ever for auto sales, supported by new model rollouts (e.g., Guangzhou Auto Show 2023). Competition is intensifying, with both NEV and ICE segments under pressure from price wars and evolving consumer preferences.