Guosen: Seats provide differentiated configurations, industry space accelerates upgrading.

Guosen released a research report stating that with the rise of independent brands and the impact on high-end models, differentiated demands are becoming more prominent. Car manufacturers are increasingly relying on intelligent product suppliers that can provide rapid responses and adapt to design changes, presenting a significant opportunity for domestic alternatives. In recent years, with the rise of independent brands and the emergence of new forces, the seating industry is upgrading around the four directions of "safety, comfort, lightweight, and intelligence," and the domestic market is expected to grow from the current 111.9 billion yuan to over 180 billion yuan by 2028. Guosen's main points are as follows: Seating provides differentiated configurations, accelerating industry space upgrades The period of the total volume dividend in the domestic automobile industry has passed, and it has now entered a stage of low growth. Both traditional fuel-powered vehicles and new energy vehicles are facing a certain degree of surplus production capacity, intensifying competition. Differentiated configurations have become the core logic for car manufacturers to attract customers. With a value of over 4000 yuan per seat, seating is an interactive component with consumer attributes, providing car manufacturers with space for differentiated configurations. In recent years, with the rise of independent brands and the emergence of new forces, the seating industry is upgrading around the four directions of "safety, comfort, lightweight, and intelligence," and the domestic market is expected to grow from the current 111.9 billion yuan to over 180 billion yuan by 2028. Seating achieves upgrades along two paths Currently, seating is upgrading towards comfort and intelligence, mainly through two paths: configuration sinking and innovation in high-end models. On one hand, vehicles priced below 300,000 yuan are accelerating the sinking of high-end product configurations, upgrading from optional to standard equipment. The core is the continuous increase in the installation rate of seating comfort configurations represented by heating, ventilation, massage, and seat memory, and the extension of these features from the front to the middle and rear seats. On the other hand, with independent brands impacting high-end models, the focus is on differentiated configurations, with innovative products such as zero-gravity seats and second-row swivel seats gradually being introduced. Seating drives changes in living space, and these two pathways are advancing simultaneously, driving the value of seating per vehicle from 4000 yuan to over 10,000 yuan, accelerating industry growth. The industry has high barriers to entry, with a highly concentrated market share The seating industry has high barriers to entry, requiring supplier recognition from original equipment manufacturers, complete assembly manufacturing, design, and cost control capabilities. The industry concentration is high, with leading companies such as Lear, Adient, Faurecia, etc., deeply bound to downstream major customers through joint ventures and other forms. Currently, foreign players dominate the market, with the top five companies (CR5) holding about 78% market share. The market can be further divided into: 1) American companies Adient and Lear, both belonging to the top tier worldwide and holding 25% market share each; 2) European companies Faurecia and Grammer, with the former holding 11% global market share; 3) Japanese companies such as Toyota Boshoku, Toyota Group, Toyoda Gosei, etc., with relatively lower market share, mainly serving Japanese clients. With the rise of independent brands, there is potential for a domestic leader to emerge in various links With the rise of independent brands and the impact on high-end models, differentiated demands are becoming more prominent. Car manufacturers are increasingly relying on intelligent product suppliers that can provide rapid responses and adapt to design changes, presenting a significant opportunity for domestic alternatives. This is reflected in Zhejiang Tenchen Controls quickly scaling up seating production, Jufeng securing orders from Nio, Ideal, etc.; more domestic companies are expanding their component products, including seat structures, which account for 15%-20% of the cost. Domestic suppliers are accelerating their breakthroughs. Risk warning: Industry penetration may not meet expectations; domestic research and development speed may not meet expectations.