With the national scrappage and renewal policy and the replacement policy of old for new in full force in October, the car market has experienced strong growth, combined with the 'Golden Week' effect in October, causing the car market to show a high-speed growth trend.
According to a research report released by Haitong Int'l, based on the statistical data from the China Association of Automobile Manufacturers, the production and sales of automobiles in October reached 2.996 million units and 3.053 million units, respectively, increasing by 7.2% and 8.7% month-on-month, and 3.6% and 7% year-on-year. In terms of penetration rate, in October, the penetration rate of new energy passenger vehicles for manufacturers was 50.1% and for retailers was 52.9%, showing an increase of 14 and 15 percentage points respectively compared to October 2023. With the national scrappage and renewal policy and the replacement policy of old for new in full force in October, the car market has experienced strong growth, combined with the 'Golden Week' effect in October. The 'Silver September, Golden October' effect is significant, and it is expected that subsidy policies such as replacement will drive an increase in annual sales.
Haitong International's main points are as follows:
In October, both production and sales of automobiles increased month-on-month and year-on-year.
According to data from the China Association of Automobile Manufacturers, the production and sales of automobiles in October reached 2.996 million units and 3.053 million units, respectively, increasing by 7.2% and 8.7% month-on-month, and 3.6% and 7% year-on-year. From January to October, the production and sales of automobiles reached 24.466 million and 24.624 million units respectively, showing a year-on-year increase of 1.9% and 2.7%. The growth rate of automobile production narrowed by 0.01 percentage points compared to January to September, while the sales growth rate expanded by 0.36 percentage points.
In October, the production and sales of passenger vehicles reached 2.706 million units and 2.755 million units, respectively, increasing by 8.2% and 9.1% month-on-month, and 7.7% and 10.7% year-on-year. From January to October, the production and sales of passenger vehicles reached 21.349 million and 21.434 million units respectively, showing a year-on-year increase of 3% and 3.7%.
In October, the production and sales of commercial vehicles reached 0.29 million units and 0.298 million units, with production decreasing by 1.5% compared to the previous month, while sales increased by 5%. Year-on-year, production and sales decreased by 23.3% and 18.3% respectively. Among them, the production and sales of trucks reached 0.246 million units and 0.255 million units, with production decreasing by 1.3% compared to the previous month, while sales increased by 5.3%. Year-on-year, production and sales decreased by 26% and 20.9% respectively. The production and sales of buses reached 0.044 million units and 0.043 million units, with production decreasing by 2.4% compared to the previous month, while sales increased by 3.3%. Year-on-year, production decreased by 3.8% while sales increased by 1.5%.
From January to October, the production and sales of commercial vehicles were 3.117 million and 3.19 million units respectively, a decrease of 5.1% and 3.4% year-on-year. Among them, the production and sales of trucks were 2.714 million and 2.786 million units respectively, a decrease of 6.2% and 4.4% year-on-year. The production and sales of buses were 0.403 million and 40.4 thousand units respectively, an increase of 2.6% and 4% year-on-year.
In October, both the retail and wholesale sales of passenger vehicles achieved year-on-year and month-on-month growth.
According to data from the China Passenger Car Association, in October, 2.645 million passenger vehicles were produced, a year-on-year increase of 7.6% and a month-on-month increase of 9.1%. This exceeded the historical high of 2.45 million units in the same period of 2023 by 0.2 million units. Manufacturers wholesaled 2.732 million units, an 11.5% year-on-year increase and a 11.3% month-on-month increase. Since 2024, cumulative retail sales have reached 17.835 million units, a 3.2% year-on-year increase. Haitong International believes that with the comprehensive promotion of national scrappage policies and local replacement policies in October, coupled with the Golden Week holiday effect, the car market showed rapid growth in October, with significant effects from the "silver September, gold October" promotion. It is expected that subsidy policies such as replacement incentives will help drive an increase in annual sales.
The retail penetration rate of new energy passenger vehicles in October was 52.9%.
According to data from the China Passenger Car Association, in October, wholesale of new energy vehicles reached 1.369 million units, a 55.2% year-on-year increase and an 11.2% month-on-month increase. From January to October 2024, wholesale reached 9.279 million units, a 36.5% year-on-year increase. Retail sales reached 1.196 million units, a 56.7% year-on-year increase and a 6.4% month-on-month increase. From January to October 2024, retail sales reached 8.327 million units, a 39.8% year-on-year increase.
In terms of penetration rate, in October, the wholesale penetration rate of new energy passenger vehicles was 50.1%, while the retail penetration rate was 52.9%, representing an increase of 14 and 15 percentage points respectively compared to October 2023. In terms of brand structure, the wholesale penetration rate of independent brand new energy vehicles in October was 65%, 35% for new energy vehicles among luxury cars, and only 6% for mainstream joint venture brand new energy vehicles.
In terms of exports, overall automobile exports in October continued the trend of strong growth. Passenger car exports (including complete vehicles and CKD) reached 0.585 million units, an 11% year-on-year increase but a 4% month-on-month decrease. New energy vehicles accounted for 27.1% of the total exports, a decrease of 1.0 percentage points from the same period, with cumulative passenger car exports reaching 3.991 million units from January to October, a 30% year-on-year increase. Haitong International believes that the global passenger car market is in the accelerated penetration stage of electrification and intelligence, where domestic independent brand main factories and the industry chain have certain leading advantages in the electric and intelligent fields. It is expected that exports of new energy vehicles in 2024 will maintain positive performance and continue to contribute to growth.
Investment advice: In 2024, the Chinese automobile market is expected to continue to maintain a stable and positive development trend, with a sustained bullish view on the automotive industry in 2024. It is recommended to focus on Weichai Power, Sinotruk, Aofu Environmental Technology, Camel Group Co., Ltd., BYD, Great Wall Motor, Baolong Automotive Corporation, Foryou Corporation, Bethel Automotive Safety Systems, Huizhou Desay SV Automotive, Ningbo Tuopu Group, Wuxi Best Precision Machinery, Ningbo Jifeng Auto Parts, Hua Yike Technology, Wencan Group, and Kunshan Huguang Auto Harness, among others.
Risk warning: Domestic economic growth rate is lower than expected; raw material prices fluctuate significantly; overseas demand recovery is lower than expected; exchange rates fluctuate significantly.
