Nomura Securities recently released a research report providing an in-depth analysis of the 2024 Guangzhou Auto Show. The report pointed out that with the development of online media platforms, traditional auto shows are gradually transforming from platforms for showcasing new models and features into sales exhibitions. Nevertheless, some emerging trends in the Chinese auto market can still be observed at the auto show, such as the aggressive development of autonomous driving capabilities, an increasing number of OEMs adopting PHEV/EREV solutions, and the continuous increase in automobile sizes, shifting towards SUVs/MPVs while expanding the cabin space of compact cars like sedans.

Analysts at Nomura Securities mentioned in their research report that during the auto show, new electric vehicle manufacturers such as BYD (01211, buy rating) attracted a lot of attention, followed by traditional local auto manufacturers and joint ventures, while purely foreign brands remained relatively quiet. Considering the above situation and the pace of market development, Nomura Securities continues to believe that electric vehicle manufacturers will further occupy market share in China by 2025. BYD remains the preferred choice in the OEM sector, while other active participants focusing on the development of autonomous driving and entering the PHEV/EREV market also have good opportunities to surpass their peers. Furthermore, leading companies in the smart automobile supply chain are expected to benefit from this trend, achieving robust growth. Nomura Securities is bullish on Huizhou Desay SV Automotive (002920.SZ, buy rating) and ForYou Corporation (002906.SZ, buy rating) within their coverage.

In terms of autonomous driving, despite the limited number of new models launched at the auto show, many active participants updated their plans for the development of advanced ADAS features. For example, Xpeng Motors (09868) CEO He Xiaopeng mentioned that the company will launch its end-to-end functional testing on November 15 and has updated its Eagle Eye vision solution for end-to-end autonomous driving models. At the same time, the management of Li Auto (02015) stated that the company will launch its end-to-end autonomous driving solution to all users in November. For Xiaomi (01810), CEO Lei Jun stated that the company will begin internal testing of its end-to-end autonomous driving solution on November 16 and may launch some pioneering functions (including end-to-end solutions) to the market starting in December. Zeekr (ZK.US) will promote its end-to-end mapless city NZP (Zeekr Navigation) functionality, expected to launch by the end of 2024, with its Hao Han Smart Driving 2.0 system. Leapmotor (09863) management noted that its self-developed end-to-end autonomous driving solution is expected to launch in the first half of 2025. From the perspective of traditional OEMs, Great Wall Motor (02333) announced that its city NOA will be fully launched in the Chinese market starting November 15 for its WEY brand's Blue Mountain model. For BYD's DENZA Z9, the company aims to achieve mapless city NOA functionality in the first quarter of 2025, while its Baojun 8 has already applied Huawei's Qiankun ADS3.0 platform for advanced ADAS functions. For SAIC (600104.SH), the company has also achieved IM Motors' mapless city NOA functionality, in cooperation with Momenta for an end-to-end solution. Finally, Nomura Securities believes that Huawei is one of the key beneficiaries in the smart automobile supply chain, as it collaborates with several OEMs/brands in the market, including AITO, Luxeed, Stelato, and the upcoming Maextro, as well as Changan Automobile (000625.SZ)'s Avatr, Dongfeng Automobile (00489)'s Voyah, BYD's Baojun 8 and Deepal, and even ICE auto OEMs like FAW-Audi (for their Q6e-tron and A5L models). Additionally, based on information from NIO (NIO.US) management, there is strong demand for the new NIO brand Onvo L60; meanwhile, the number of battery swapping stations under the Le Dao brand is expected to increase from 1,000 stations at the end of 2024 to 2,000 by April 2025. Xpeng management also indicated that the production capacity of the Mona M03 will be increased by 40%, achieving a capacity of 0.02 million units before the Chinese New Year in 2025.

Nomura Securities believes that as the entire market enters the second half of competition, smart automobile functions will become increasingly important to the overall Chinese auto market.