Central China: Significant effectiveness in trading in old for new cars, the peak season for car sales in December continues.

Central China released a research report stating that the effectiveness of the old-for-new policy continues, with nearly 2.7 million vehicles scrapped and replaced nationwide since the policy was implemented by December 19. Over 3.1 million vehicles have been replaced. With new car models being launched intensively at the end of the year, industry demand continues to rise. It is recommended to continue monitoring marginal changes brought by the advancement of intelligentization, and to be optimistic about investment opportunities in self-owned brands with strong product cycles and stable global expansion, as well as in the intelligentization incremental components of the automotive industry chain such as Huawei and Xiaomi; the commercial vehicle market continues to recover driven by the old-for-new policy, and investment opportunities in the passenger and heavy-duty truck sectors should be monitored. Key points from Central China are as follows: Market performance: In December (December 1-15), 1.083 million passenger vehicles were retailed, with monthly growth rates of 34% and 14% respectively compared to the previous month. The cumulative retail sales volume for the year reached 21.341 million units, an increase of 6% compared to last year. According to data from the China Association of Automobile Manufacturers, passenger car sales reached a new monthly high in November, with sales of 3.001 million units, a year-on-year increase of 15.2% and a monthly increase of 9%. From January to November, cumulative passenger car sales reached 24.435 million units, a 5% increase year-on-year. Independent brands performed strongly, with cumulative passenger car sales for individual brands reaching 15.9 million units from January to November, a 22.5% year-on-year increase, increasing their market share by 9.3 percentage points to 65.1%. Market share of German, American, Japanese, and South Korean brands was 14.7%, 6.4%, 11.1%, and 1.6% respectively. Truck and bus sales saw a double growth month-on-month, with continuous strength in new energy heavy-duty trucks. In November, truck and bus sales reached 269,000 and 46,000 units respectively, with monthly growth rates of 5.5% and 6.5%. New energy heavy-duty trucks continued to outperform the industry, with sales reaching over 10,000 units in November for the first time, an increase of 117% year-on-year and 22% month-on-month. Cumulative sales from January to November reached 66,800 units, a 139% year-on-year increase, accounting for 12.54% of sales in the heavy-duty truck market, a 7.0 percentage point increase from the previous year. The penetration rate of new energy vehicles continues to rise. In November, sales of new energy vehicles reached 1.512 million units, a 47.4% year-on-year increase, with a penetration rate of 45.6%. From January to November 2024, cumulative sales of new energy vehicles reached 11.262 million units, a 35.6% increase year-on-year, with a market share of 40.3%. In terms of power types, the market share of plug-in hybrids continued to rise, with the cumulative sales ratio of pure electric models and plug-in hybrids reaching 59.8% and 40.1% respectively from January to November. Automobile exports are rapidly growing. In November, automobile exports reached 490,000 units, a 9.5% decrease compared to the previous month but a 1.6% increase year-on-year. New energy vehicle exports reached 83,000 units, with month-on-month and year-on-year decreases of 14.1% and 35.2% respectively. From January to November, cumulative automobile exports reached 5.345 million units, a 21.2% year-on-year increase. New energy vehicle exports reached 1.141 million units, a 26.7% year-on-year increase. According to data from the General Administration of Customs, from January to October 2024, Russia, Mexico, and the United Arab Emirates were the top three countries for complete vehicle exports, exporting 957,000 units, 386,000 units, and 261,000 units respectively. The top three countries for new energy vehicle exports were Belgium, Brazil, and the United Kingdom. Recommendations for attention: In terms of intelligentization, the commercialization of Robotaxi is accelerating, with GAC Aion and Xiao Ma Zhi Xing reaching a cooperation agreement to deploy thousands of Robotaxis by 2025; NIO has launched a new brand name, Firefly, and opened pre-sales, while Xiaomi has announced a new SUV model, Xiaomi YU7, and a series of intelligent models, such as Zhi Jie New S7, Zhi Jie R7, NIO ET9, and New Avita 11, are being intensively launched. Risk warnings: 1) New energy vehicle production and sales fall below expectations; 2) Industry policy execution is weaker than expected; 3) Industry competition intensifies; 4) Rise in raw material prices.