Caifeng reported on September 30th (by reporter Zhang Yipeng), "Bull market is here", this key phrase has reached a near-high search volume in recent years, while the automotive market entering the 2024 'closing season' is also receiving attention.

On September 30, according to Caifeng's monitoring data, 35 minutes after the opening bell, the turnover of the Shanghai and Shenzhen stock markets exceeded 1 trillion yuan, more than 410 billion yuan higher than the same time the previous trading day, setting a new record for the fastest trillion in history. By the noon closing, the Chinext Price Index rose more than 11% to exceed 2100 points, with over 1300 stocks across all markets rising more than 10%. The turnover of the Shanghai and Shenzhen stock markets in the first half of the day was 1.66 trillion yuan, an increase of 712.5 billion yuan in volume from the previous trading day.

Stocks are all bullish, can the automobile market 'leverage' the rebound? On September 30, Chery ICAR released a poster with the slogan "Buy a red car, long-lasting prosperity," with the main visual showing the continuously rising SSE conglomerates index. "The stock market is fully bullish, in the short term it is a recovery in the dimension of capital markets, but in the medium to long term it is good news for all industries, with the automobile industry being one of them", said industry insiders.

Stable stock market, booming auto market

Three days ago on September 26, which many investors regarded as a day of relief. At that time, the Shanghai Composite Index returned to the 3000-point mark after 68 trading days, with the turnover of the Shanghai and Shenzhen stock markets reaching 1.1625 trillion yuan, an increase of 5.1 billion yuan in volume from the previous trading day, breaking the trillion mark for two consecutive trading days. Over 5100 stocks rose across all markets, with over a hundred hitting the daily limit.

"Definitely more than 0.1 million vehicles in 2024, the recent policy adjustments have been too rapid." At the recent 2024 World New Energy Vehicle Conference, Cui Dongshu, Secretary General of the China Passenger Car Association, estimated that the domestic retail sales of automobiles in 2024 will reach 22.3 million vehicles, a 3% increase compared to the previous year. Among them, the domestic retail sales of new energy passenger vehicles will be 10.4 million vehicles, a 34% increase from the previous year. At the end of last year, the China Passenger Car Association had estimated that the domestic retail sales of passenger cars in 2024 would be 22.2 million vehicles.

"Looking back over the past decade, there is a certain relationship between the stock market and the auto market, that is, 'when the stock market is unstable, the auto market sees no growth.'" The above-mentioned industry insiders believe that the promotion of consumption by the rising stock market is mainly achieved through the wealth effect. While improving residents' disposable income from investment returns, it also raises residents' income expectations, leading to a higher marginal propensity to consume. "However, the release of the stock market wealth effect has a certain lag effect, therefore the peak increase in car sales will occur after the peak of the stock market."

In the eyes of more industry professionals, the policy environment of the auto market this year is more complex. In addition to the expected 'bull market' effect on the auto market, disruptive factors also include the adjusting real estate policies, the various consumption stimulation policies being successively introduced in various regions, and the inherent cyclical factors of the auto market itself.

On the evening of September 29, first-tier cities such as Shanghai, Guangzhou, and Shenzhen successively announced policies to loosen real estate regulations. The introduction of this series of policies, apart from bringing potential investment returns to consumers, will also to some extent 'absorb' funds that were flowing into the auto market; and the relatively poor liquidity in the real estate funds will also lag behind the wealth effect on the auto market.

Compared to the uncertainty of how real estate policies affect the auto market, the direct impact of consumption stimulation policies on consumer purchasing decisions has already been evident in boosting the auto market.

"Silver September" is expected, the peak season continues.

On September 29, the Shanghai Municipal Bureau of Commerce and five other departments issued the 'Shanghai Municipality's detailed implementation rules for boosting the subsidy policy for trading in old cars for new ones (combustion engine cars)', providing a one-time subsidy of 120,000 yuan for eligible consumers to purchase a new car. Prior to this, many regions across the country had enhanced the subsidy intensity for trading in old cars for new ones, including Peking, Guangdong, Chongqing, Zhejiang, Sichuan, Hubei, Hunan, Heilongjiang, Qinghai, and others.

In terms of results, the combination of national and local policies for trading in old cars for new ones has had a very clear stimulating effect on the auto market. Data shows that as of midnight on September 25, the national auto scrappage rebate renewal platform had received over 1.13 million applications for car scrappage renewal subsidies, with over 1.68 million registered users on the platform, and the subsidy application volume continues to grow rapidly. Zhao Chenxin, Deputy Director of the National Development and Reform Commission, predicts that 2 million low-emission standard passenger vehicles will be retired by the end of the year.

In the terminal market, in anticipation of the upcoming 'Silver September', main manufacturers, dealers, and others have made preparations with various promotional methods.

On September 30, SAIC Volkswagen announced that from now until October 13, 2024, they will launch activities including a 2,000 yuan consumer voucher and up to 35,000 yuan subsidy for trading in old cars for new ones; on the same day, salespeople at Huawei stores told reporters that the newly launched Huawei M7 had delivered over 200,000 units in the past 12 months, and currently the vehicle's purchase rights extend to October 8. 'The current promotion is very attractive, with maximum benefits up to 38,800 yuan, and there is also a National Day gift of an 18,000 yuan charging and discharging kit for the upcoming holiday.' Salespeople at Tesla stores also mentioned that until October 31, customers can drive away with a zero-interest Tesla Model Y, with a maximum 5-year term, an upfront payment of 79,900 yuan, and a minimum daily installment of 95 yuan.

On the dealer side, a salesperson from a Mercedes-Benz 4S store in Shenzhen stated that the store recently launched the "National Day Car Buying Festival" promotion, where customers can enjoy up to 15,000 yuan in national replacement subsidies, up to 15,000 yuan in Shenzhen replacement subsidies, and up to 15,000 yuan in Mercedes-Benz fan perks; a Toyota 4S store in Beijing GAC Toyota introduced the theme promo event "Silver Tenth Fan Season National Day Mega Promotion", with up to 35,000 yuan in replacement subsidies, and all models can enjoy limited-time mega discounts and five great gifts when purchasing a car.

According to the China Passenger Car Association data, passenger vehicle retail sales in the first three weeks of September increased by 10% year-on-year compared to September last year and compared to the same period last month. The latest auto industry weekly report from China Great Wall Securities indicates that passenger vehicle terminal performance in September was strong, bullish on the continuation of the "Golden September and Silver October" peak season market in October.