Haitong International: Automobile production and sales in October increased year-on-year, with the car market showing a trend of rapid growth.

Haitong International released a research report, stating that according to the statistics of the China Association of Automobile Manufacturers, the production and sales of automobiles in October reached 2.996 million and 3.053 million vehicles respectively, with month-on-month growth of 7.2% and 8.7% respectively, and year-on-year growth of 3.6% and 7% respectively. In terms of penetration rate, the wholesale penetration rate of new energy passenger cars in October was 50.1%, and the retail penetration rate was 52.9%, with an increase of 14 and 15 percentage points respectively compared to October 2023. With the comprehensive implementation of national scrappage renewal policies and local scrappage policies in October, the market was stimulated, combined with the "Golden Week" effect, the market showed a rapid growth trend in October, and the "Silver September, Golden October" effect was significant. It is expected that replacement subsidies and other policies will help drive an increase in annual sales. Haitong International's main points are as follows: Double growth in automobile production and sales in October According to data from the China Association of Automobile Manufacturers, automobile production and sales in October reached 29.96 million and 30.53 million vehicles respectively, with month-on-month growth of 7.2% and 8.7% respectively, and year-on-year growth of 3.6% and 7% respectively. From January to October, automobile production and sales reached 244.66 million and 246.24 million vehicles respectively, with year-on-year growth of 1.9% and 2.7% respectively. The growth rate of automobile production narrowed by 0.01 percentage points compared to the period from January to September, while the sales growth rate increased by 0.36 percentage points. In October, the production and sales of passenger cars reached 2.706 million and 2.755 million vehicles respectively, with month-on-month growth of 8.2% and 9.1% respectively, and year-on-year growth of 7.7% and 10.7% respectively. From January to October, the production and sales of passenger cars reached 21.349 million and 21.434 million vehicles respectively, with year-on-year growth of 3% and 3.7% respectively. In October, the production and sales of commercial vehicles reached 290,000 and 298,000 vehicles respectively, with a month-on-month decrease in production of 1.5% and an increase in sales of 5%; year-on-year, there was a decrease of 23.3% and 18.3% respectively. Among them, the production and sales of trucks reached 246,000 and 255,000 vehicles respectively, with a month-on-month decrease in production of 1.3% and an increase in sales of 5.3%, and year-on-year decreases of 26% and 20.9% respectively; the production and sales of buses reached 44,000 and 43,000 vehicles respectively, with a month-on-month decrease in production of 2.4% and an increase in sales of 3.3%, with a year-on-year decrease in production of 3.8% and an increase in sales of 1.5%. From January to October, the production and sales of commercial vehicles reached 3.117 million and 3.19 million vehicles respectively, with year-on-year decreases of 5.1% and 3.4% respectively. Among them, the production and sales of trucks reached 2.714 million and 2.786 million vehicles respectively, with year-on-year decreases of 6.2% and 4.4% respectively; while the production and sales of buses reached 403,000 and 404,000 vehicles respectively, achieving year-on-year growth of 2.6% and 4% respectively. In October, both the wholesale and retail sales of passenger cars achieved month-on-month and year-on-year growth According to data from the China Passenger Car Association, production of passenger cars reached 2.645 million vehicles in October, with a year-on-year increase of 7.6% and a month-on-month increase of 9.1%, reaching 20,000 vehicles higher than the historical high point of 2.45 million vehicles in the same period in 2023; wholesale reached 2.732 million vehicles, with a year-on-year increase of 11.5% and a month-on-month increase of 11.3%, and a year-on-year increase of 7.2%. Retail sales since 2024 totaled 17.835 million vehicles, with a year-on-year increase of 3.2%. Haitong International believes that with the comprehensive implementation of national scrappage renewal policies and local scrappage policies in October, the market was stimulated, combined with the "Golden Week" effect, the market showed a rapid growth trend in October, and the "Silver September, Golden October" effect was significant. It is expected that replacement subsidies and other policies will help drive an increase in annual sales. The retail penetration rate of new energy passenger cars reached 52.9% in October According to data from the China Passenger Car Association, wholesale of new energy vehicles reached 1.369 million vehicles in October, with a year-on-year increase of 55.2% and a month-on-month increase of 11.2%, totaling 9.279 million vehicles wholesale since January 2024, with a year-on-year increase of 36.5%; retail reached 119,600 vehicles, with a year-on-year increase of 56.7% and a month-on-month increase of 6.4%, totaling 8.327 million vehicles retail since January 2024, with a year-on-year increase of 39.8%. In terms of penetration rate, the wholesale penetration rate of new energy passenger vehicles in October was 50.1%, and the retail penetration rate was 52.9%, with increases of 14 and 15 percentage points respectively compared to October 2023. In terms of brand structure, the wholesale penetration rate of new energy vehicles in October was 65% for domestic brands, 35% for luxury vehicles, and only 6% for mainstream joint venture brands. In terms of exports, overall automobile exports continued to show strong growth characteristics in October, with passenger car exports (including complete vehicles and CKD) reaching 585,000 units, a year-on-year increase of 11%, and a month-on-month decrease of 4%, with new energy vehicles accounting for 27.1% of total exports, a decrease of 1.0 percentage points year-on-year. From January to October, passenger car exports totaled 3.991 million vehicles, with a year-on-year increase of 30%. Haitong International believes that the global passenger car market is in the stage of accelerating electrification and intelligence penetration, and domestic independent brands and industrial chains have a certain leading advantage in the field of electric intelligence. New energy vehicle exports are expected to maintain impressive performance in 2024 and continue to contribute incremental growth. Investment recommendations: China's automobile market is expected to continue to maintain a stable and positive development trend in 2024, and the automobile industry in 2024 is still favored. It is recommended to pay attention to Weichai Power (000338.SZ), Sinotruk Jinan Truck (000951.SZ), Aofu Environmental Technology Co., Ltd. (688021.SH), Camel Group Co., Ltd. (601311.SH), BYD Company Limited (002594.SZ), Great Wall Motor (601633.SH), Shanghai Baolong Automotive Corporation (603197.SH), and Foryou Corporation (0.02906.SZ), Bethel Automotive Safety Systems(603596.SH), Huizhou Desay SV Automotive(002920.SZ), Ningbo Tuopu Group(601689.SH), Wuxi Best Precision Machinery(300580.SZ), Ningbo Jifeng Auto Parts(603997.SH), Shanghai W-Ibeda High Tech.Group(688023.SH), Wencan Group(603348.SH), and Kunshan Huguang Auto Harness(605333.SH) etc.Risk Warning: Domestic economic growth is lower than expected; Raw material prices fluctuate significantly; Overseas demand recovery is lower than expected; Exchange rates fluctuate significantly.