Zhaojin International: AI development reshapes the competitive landscape of the automotive industry. Most car companies will launch a large number of new models in March and April.

CMB International released a research report stating that the current AI wave is sweeping through the Chinese automotive industry. According to calculations, the industry's average discount in February 2025 increased by 0.1 percentage points compared to the previous month, mainly due to the expansion of discounts for German and domestic brands exceeding the narrowing of discounts for Japanese and Korean brands. The report pointed out that the development of AI technology is reshaping the competitive landscape of the automotive industry, with intelligent driving becoming the new focus of competition for car companies. Given that most car companies will launch a large number of new models in March-April, it is expected that price wars will escalate further, although some top manufacturers this year are more inclined to compete in the field of intelligent driving rather than directly lowering prices. Investments and competition in the field of intelligent driving will to some extent affect the direction of price wars and the redistribution of market share. The main points of CMB International are as follows: Wei Xiaoli and Leapmotor In February, the average discount for Ideal Auto increased by 2 percentage points to 4.5% compared to the previous month. Considering the increased discount policies, the bank expects discounts to further expand in March, and weekly sales have already returned to growth. The company expects to launch an upgraded version of the intelligent driving model in May, and the i8 (the first pure electric SUV) in July. NIO had an average discount of 2.6% in February, although the Lixiang brand still did not offer price discounts in February, the bank noted that the number of free swap coupons increased from 12 to 24. Xiaopeng's average discount in February increased by 0.7 percentage points compared to the previous month, mainly due to the current models G6, G9, and X9, with the redesigned G6 and G9 expected to be launched this month. Leapmotor saw a 0.5 percentage points increase in the average dealer-side discount in February to 9.8%, with the new compact SUV (B10) starting pre-sale on March 10th. Great Wall Motors and Geely Great Wall's average discount in February increased by 0.4 percentage points to 11.8%, mainly due to the rising discounts for Ora Cat and Weipai Lanshan. Three main models, including the redesigned Tank 300, the second-generation Haval Xiaolong Max, and the redesigned Weipai Gaoshan are planned for launch in March-April, which will drive sales growth in the second quarter. Geely's average discount in February was 9.4%, mainly benefiting from the launch rights of the Starship 7 and the introduction of the Galaxy L6 and L7 EM-i versions. Considering the large discounts of 3,000-6,000 yuan on the Galaxy series models announced at the Geely AI conference on March 3rd, the bank expects Geely's discounts to expand month-on-month in March. Geely announced that future models of the Galaxy brand launched will come with standard intelligent driving functions, and the bank believes that initial user experience, technology iteration speed, and the pace of intelligent driving function introduction will be key to maintaining competitiveness. Guangzhou Automobile Group and BMW In February, both GAC and EA's average discounts increased by 0.1-0.2 percentage points month-on-month, mainly driven by GAC E9 and EA RT. With the launch of EA UT electric vehicle on February 28th, the bank expects EA's average discounts to slightly narrow in the coming months. GAC Toyota's average discount in February narrowed by 0.8 percentage points to around 20.3%, the lowest since July 2024, mainly due to the narrowing of discounts for Weilanda. GAC Honda's average discount increased by 0.3 percentage points to 21.1%, reaching a historical high. The retail sales of GAC Toyota and Honda in February may have declined by more than 20% and 40% respectively compared to the previous month. Huachen BMW's average discount in February narrowed by 1.1 percentage points to 29.2%, benefiting from the launch of the new long-wheelbase X3 on February 14th, with an entry price reduction of about 50,000 yuan (about 10%). Although BMW management is gradually recognizing the harshness of the Chinese market, this year BMW dealer profits for new cars still rely on special rebates from the manufacturers.