20231106-招银国际-China_Auto_Sector_Oct_discounts_widened_after_3Q23_earnings_beat_4页_618kb

Summary of CMB Report: October 2023 Auto Sector Discount Analysis

This report from CMB International Global Markets focuses on dealer discounts for major Chinese and luxury automakers in October 2023. The analysis is based on dealer discount data and sales volumes, with key trends driven by increased competition, strong third-quarter earnings, and the introduction of new energy vehicles (NEVs). Overall, discounts widened on a month-over-month basis, though investors may prioritize new model performance.

Key findings:

• Discounts generally expanded for most brands in October 2023, continuing a trend observed in September.
• Great Wall Motor: Discounts remained largely stable, with minor variations; new models like Menglong and Gaoshan PHEVs showed small discounts post-launch.
• Geely: Discounts widened slightly due to specific models like Xingyue and Lynk & Co 06; overall average discounts stayed around 7-9% for seven months.
• BYD: Discounts increased significantly, particularly in the EV segment, linked to heightened B-class competition and a recent promotion; BYD maintains the lowest average discounts among major players.
• GAC Group: Discounts rose for several sub-brands, with Aion experiencing wholesale volume declines amid inventory issues; new model launches could affect investor sentiment.
• BMW and Mercedes-Benz: BMW discounts surged to record highs due to strict subsidies, while Mercedes-Benz remained relatively stable, offsetting some losses in EV models with narrowed discounts in others.

Investors should note that while discounts widened, the focus shifts to stronger-than-expected Q3 earnings and NEV market dynamics, potentially easing concerns about sales declines. The full report includes detailed disclosures and risks, including potential conflicts of interest and market fluctuations.