CITIC SEC: Several heavyweight new cars are expected to be launched this year, and domestic demand is expected to become an important catalyst for the automotive sector in the second quarter of 2026.

CITIC SEC has released a research report stating that the 2026 Beijing Auto Show will open on April 24th, presenting three major trends: an increase in the supply of 5.2m+ large five-seater/large six-seater SUVs, 800V+ large batteries gradually becoming standard for cars in the 300,000 yuan price range, and AI becoming a selling point for car models and a new main line for car companies. The firm believes that with the launch of several heavyweight new cars at the Beijing Auto Show this year, domestic demand is expected to become an important catalyst for the automotive sector in Q2 2026. CITIC SEC's main points are as follows: Expect Beijing Auto Show to drive domestic demand and become an important catalyst for the automotive sector in Q2 2026. According to data from the China Association of Automobile Manufacturers, in the first quarter of 2026, automobile production and sales reached 7.039 million and 7.048 million units respectively, representing year-on-year decreases of 6.9% and 5.6%. Domestic sales were 4.823 million units, a decrease of 20.3% year-on-year, while automobile exports were 2.226 million units, an increase of 56.7% year-on-year, with March export sales reaching 748,000 units, up 82% year-on-year. Since the beginning of the year, domestic sales have been under pressure, mainly due to the implementation of local policies for subsidies for replacing old vehicles, which take some time to come into effect. Under the trend of direct marketing of new cars to users in the car industry, consumers have been exposed to the new car release pace of car manufacturers earlier in the year, leading to a delay in consumer car purchase decisions. The firm believes that with the launch of several heavyweight new cars at the Beijing Auto Show this year, domestic demand is expected to become an important catalyst for the automotive sector in Q2 2026. The 2026 Beijing Auto Show presents three major trends: 9 series flagship, large batteries + fast charging, AI + cars. Supply of 5.2m+ large five-seater/large six-seater SUVs is increasing. The Ideal L9 and Li Xingwei brands are taking on the important task of reshaping the price range and product lineup; the Wanjie M9 has undergone a medium-term facelift both inside and out; new players such as Weipai V9X (pre-sale price of 371,800-411,800 yuan), Xiaopeng GX (pre-sale price of 399,800 yuan), Lingbao D19 (selling price of 219,800-269,800 yuan), BYD Company Ltd. Da Tang (expected selling price of around 400,000 yuan) are entering the market in rapid succession. Although the NIO ES9 (5.3 meters/3.2 meters wheelbase) is priced slightly above 500,000 yuan, the Baas program will reduce the threshold to 420,000 yuan. 800V+ large batteries are gradually becoming standard for cars in the 300,000 yuan price range. The combination of 800V high-voltage platform and large batteries has shifted from being exclusive to flagship models to becoming a standard strategy for car manufacturers, with both independent and joint venture brands following suit. Mainstream car manufacturers such as BYD Company Ltd., Ideal, Wanjie, Xiaopeng, and others are focusing their new models on supporting 800V. AI has become a selling point for car models and a new main line for car company marketing. At this year's Beijing Auto Show, AI has become the core narrative for car company marketing, with both independent, new forces, and joint venture brands using AI as a core selling point. Car companies are integrating capabilities such as cabins, smart driving, chassis, and energy management under the AI label, reducing user cognitive costs and shaping a high-tech image, becoming the core leverage point for product premiums and brand differentiation. Risk factors: Risks of domestic macroeconomic performance falling below expectations; risks of insufficient overseas demand, domestic consumption, or government investment falling below expectations; risks of insufficient chip supply leading to lower than expected vehicle shipments; risks of substantial increases in key raw material prices; risks of significant valuation declines for related companies due to accidents involving autonomous driving.