BOCOM INTL: The passenger car market in March showed a clear trend of marginal improvement, with strong momentum in the export of new energy vehicles continuing.

BOCOM INTL released a research report stating that in March, the national retail sales of passenger cars reached 1.648 million units, a year-on-year decrease of 15.0% and a month-on-month increase of 59.4%; due to adjustments in the new energy vehicle market subsidy policy and fewer new models in the market compared to the same period last year, the cumulative retail sales in the first quarter were 4.226 million units, a year-on-year decrease of 17.4%. From the export perspective, benefiting from the continuous increase in the overseas recognition of self-owned new energy vehicles, the export of new energy passenger cars reached 349,000 units in March, an increase of 140% year-on-year. Looking ahead, the automotive industry is ushering in a period of intensive new car launches in the second quarter, with the release of multiple heavyweight models boosting market demand. Coupled with the catalytic effect of the Beijing Auto Show, industry sales are expected to continue to improve month-on-month. Key points from BOCOM INTL are as follows: The passenger car market showed a clear marginal improvement in March. In March, the national retail sales of passenger cars reached 1.648 million units, a year-on-year decrease of 15.0% and a month-on-month increase of 59.4%; due to adjustments in the new energy vehicle market subsidy policy and fewer new models in the market compared to the same period last year, the cumulative retail sales in the first quarter were 4.226 million units, a year-on-year decrease of 17.4%. In terms of market structure, domestic brands performed steadily, with retail sales of 1.02 million units in the month, an increase of 61% month-on-month. Although the market share decreased by 0.8 percentage points year-on-year, it still maintained an absolute dominant position with a market share of 61.8%. Joint venture brands sold 410,000 units in the month, with a year-on-year/ month-on-month change of -13%/+54%, and the market share of German/Japanese/American brands changed by -0.7/+1.0/+0.1 percentage points to 16.0%/13.3%/6.9%. Strong rebound in the new energy vehicle market in March, with a penetration rate exceeding 50% again. In March, the retail sales of new energy passenger cars reached 848,000 units, a month-on-month increase of 82.6%. Although affected by the high base number last year, the year-on-year decrease was 14.4%, but the market penetration rate has significantly increased, rising by 6.6 percentage points month-on-month to 51.5%, a slight increase of 0.3 percentage points compared to the same period last year. In terms of specific divisions, the electrification transformation of various sectors is accelerating: domestic brands continue to play a leading role, with a high penetration rate of 73.5% for new energy vehicles, an increase of 9 percentage points month-on-month; luxury brand new energy vehicle penetration rate reached 33.9%, an increase of 1.3 percentage points month-on-month. In terms of market share, the market share of mainstream joint venture brand new energy vehicles in March increased to 3.4%, an increase of 0.8 percentage points year-on-year; The retail share of new energy vehicles of domestic brands decreased by 5 percentage points year-on-year to 66.6%; New energy brands showed steady performance, holding a 21.5% market share. Continued strong momentum in exports, with new energy exports accounting for over 50%. In March, the total export of passenger cars (including complete vehicles and CKD) reached 695,000 units, an increase of 74.3% year-on-year and an increase of 25.2% month-on-month. Domestic brands continued to play a leading role in going global, with 606,000 units exported in the month, an increase of 76% year-on-year; Joint venture and luxury brands exported 88,000 units, an increase of 65% year-on-year. Benefiting from the continuous increase in the overseas recognition of self-owned new energy vehicles, the export of new energy passenger cars in March reached 349,000 units, an increase of 140% year-on-year; The proportion of new energy vehicles in the total export volume climbed to 50.2%, a significant increase of 13.7 percentage points compared to the same period last year. Investment insights It is recommended to focus on targets with high growth certainty in export business this year, the commercialization process of physical AI in the field of autonomous driving, the technological iteration of leading car companies in large models, and the cross-border extension of car companies into new business areas such as humanoid Siasun Robot&Automation. Recommendations include: Xiaopeng Motors-W (09868) continuously launches extended-range models, while overseas localization production gradually lands, large model updates and humanoid Siasun Robot&Automation; GEELY AUTO (00175) promotes internal resource integration after privatization by Jingkui, leading to high overseas sales volume; BYD Company Limited (01211) continues to increase its overseas sales volume, strengthens its high-end brand and accelerates its intelligentization to further improve profitability.