Core Insights - In August 2025, the automotive production and sales reached 2.815 million and 2.857 million units respectively, with month-on-month growth of 8.7% and 10.1%, and year-on-year growth of 13% and 16.4% [2][3] - For the week of September 1-7, 2025, retail sales of passenger cars were 304,000 units, a year-on-year decrease of 10% and a month-on-month decrease of 4%, while wholesale sales were 307,000 units, a year-on-year decrease of 5% but a month-on-month increase of 9% [2][3] Weekly Market Performance - During the week of September 8-12, 2025, the CS automotive index rose by 0.21%, while the CS passenger vehicle index fell by 0.37%, and the CS commercial vehicle index decreased by 1.06% [2] - The CS automotive parts index increased by 0.72%, and the CS automotive sales and service index rose by 4.23%, while the electric vehicle index fell by 0.08% and the smart vehicle index increased by 1.36% [2] - The Shanghai Composite Index rose by 1.66% and the CSI 300 Index increased by 1.93%, indicating that the CS automotive index underperformed these indices by 1.72 percentage points and 1.45 percentage points respectively, with a year-to-date increase of 23.76% [2] Cost Tracking and Inventory - As of September 10, 2025, the prices of float glass, aluminum ingots, and zinc ingots changed year-on-year by -9.4%, +7.1%, and -5.2% respectively, and month-on-month by -6%, +0.5%, and -1.1% [3] - The inventory warning index for automotive dealers in August was 57.0%, showing a year-on-year increase of 0.8 percentage points and a month-on-month decrease of 0.2 percentage points [3] Market Focus - Key developments include partnerships in autonomous driving, such as Horizon Robotics collaborating with Hello to accelerate Robotaxi deployment, and the launch of new models like the all-new Wanjie M7, which saw over 100,000 pre-orders within an hour [3] - The Ministry of Industry and Information Technology and other departments issued a joint plan for stabilizing growth in the automotive industry for 2025-2026 [3] Investment Recommendations - In the medium to long term, the focus is on opportunities in incremental components driven by the rise of domestic brands and electric intelligence [4] - Recommended companies include Leap Motor, JAC Motors, and Geely for strong new product cycles, and companies like Kobot, Huayang Group, and Junsheng Electronics for smart technology [4]

Group 1 - The Hong Kong automotive stocks experienced a rally, with NIO leading the gains by over 8%, followed by Geely, GAC Group, and Li Auto with increases of over 2%, and BYD with a rise of 1.55% [1] - The Ministry of Industry and Information Technology and seven other departments jointly issued the "Automobile Industry Stabilization and Growth Work Plan (2025-2026)" on September 13, 2025, aiming to promote qualitative improvements and reasonable quantitative growth in the automotive industry [1] - The plan targets approximately 32.3 million vehicle sales in 2025, representing a year-on-year growth of about 3%, with a specific goal of 15.5 million new energy vehicle sales, reflecting a year-on-year increase of around 20% [1] Group 2 - NIO announced that the NIO Day 2025 will be held on September 20, where the new ES8 will officially launch, and nationwide deliveries have already commenced [1] - BYD recently announced the launch of the Tang DM-i smart driving version with a new 175KM variant, offering three configurations with official prices ranging from 179,800 to 199,800 yuan [1] - Geely has received formal approval from its shareholders to privatize Zeekr [1]

Group 1 - The Hong Kong automotive stocks experienced a rally, with NIO leading the gains by over 8%, followed by Geely, GAC Group, and Li Auto with increases of over 2%, and BYD up by 1.55% [1] - The Ministry of Industry and Information Technology and seven other departments jointly issued the "Automobile Industry Stabilization and Growth Work Plan (2025-2026)" on September 13, 2025, aiming for qualitative improvements and reasonable quantitative growth in the automotive industry [1] - The plan targets approximately 32.3 million vehicle sales in 2025, representing a year-on-year growth of about 3%, with a specific goal of 15.5 million new energy vehicle sales, reflecting a year-on-year increase of around 20% [1] Group 2 - NIO announced that the NIO Day 2025 will be held on September 20, where the new ES8 will officially launch, and nationwide deliveries have already commenced [1] - BYD recently introduced the Tang DM-i Intelligent Driving version with a new 175KM variant, offering three configurations with official prices ranging from 179,800 to 199,800 yuan [1] - Geely has received formal approval from Zeekr shareholders for the privatization of Zeekr [1]

Core Insights - The automotive industry is undergoing a brutal reshuffle, with predictions that only five companies will survive in the future [1] - Traditional automakers are focused on survival, while new entrants are emerging despite the challenges [1] - The entry barrier for new automotive brands is estimated to require at least 30 billion yuan [1] Group 1: R&D and Manufacturing Costs - The first step in car manufacturing is R&D, with costs varying significantly based on company positioning; for instance, NIO spent 1.465 billion yuan in its first full fiscal year [2] - New brands often lack production qualifications and typically choose to outsource manufacturing; NIO invested over 220 million yuan in 2018 for its production line [2] - Component costs are a major expense, with raw material costs consistently accounting for over 90% of total costs for companies like Leap Motor [4] Group 2: Sales and Marketing Expenses - Sales channels can be direct, dealer-based, or mixed, with direct sales being the most expensive, costing 4-5 million yuan annually per store [4] - Marketing expenses for launching a new vehicle can range from 50 million to 200 million yuan, with total sales and management costs averaging around 3 billion yuan for the first vehicle [5] - New brands must continuously invest in R&D, marketing, and sales to survive, with cumulative financing often exceeding 10 billion yuan before reaching IPO [5][8] Group 3: Financial Viability and Challenges - New brands face significant financial challenges, with companies like Neta Motors reporting cumulative losses of 18.3 billion yuan from 2021 to 2023 [7] - Achieving profitability is a long journey, with companies like Li Auto and Leap Motor taking two years to reach breakeven [7] - The total investment required for a new automotive brand to reach profitability is estimated at around 30 billion yuan, considering R&D, manufacturing, and operational costs [8] Group 4: Market Dynamics and New Entrants - The influx of new automotive brands is notable, but only those with substantial financial backing, like Xiaomi with 100 billion yuan, are likely to succeed [9] - Some new entrants are opting for niche markets such as supercars and logistics vehicles to avoid direct competition [9] - Historical examples, such as Saleen Automotive, illustrate the risks of entering the automotive market without adequate financial planning [9]

Core Viewpoint - The China Automotive Industry Association released the "Supplier Payment Norms Initiative" on September 15, urging automakers to comply with the "Regulations on Payment to Small and Medium-sized Enterprises" and to avoid exploiting their dominant positions to harm suppliers' interests, aiming to build a collaborative and win-win ecosystem in the automotive industry for high-quality development [1]. Group 1: Industry Response - A total of 17 automakers, including FAW, Dongfeng, Changan, SAIC, GAC, BAIC, Chery, Jiangqi, BYD, Geely, Great Wall, Seres, NIO, Li Auto, Xpeng, Leap Motor, and Xiaomi, have publicly committed to the payment initiative [1]. - The initiative provides clear guidance for building a collaborative ecosystem between complete vehicles and components, promoting high-quality development in the automotive industry [5][8]. Group 2: Specific Company Actions - FAW has unified the payment term for suppliers to within 60 days and optimized internal procurement and financial settlement processes to maintain a healthy market economy [3]. - Dongfeng will implement the initiative's requirements in key areas such as order confirmation, delivery, acceptance, payment, and settlement to protect supplier rights and enhance supply chain resilience [5]. - Changan has also committed to a 60-day payment term and has implemented an innovative payment process to ensure efficient cash flow for suppliers [7]. - SAIC has announced a unified 60-day payment term and will avoid using commercial acceptance bills that increase supplier financial pressure [8]. - GAC has adhered to a payment principle of not exceeding 60 days for 28 years and has established a comprehensive management system for the payment process [10]. - BAIC emphasizes equal, voluntary, fair, and honest principles in supplier relationships and opposes unreasonable payment practices [12]. - Chery has implemented measures to shorten the average payment period for suppliers and alleviate financial pressure on small and medium-sized enterprises [14]. - Jiangqi is enhancing payment efficiency and transparency while ensuring all suppliers receive fair and efficient payment experiences [15]. - BYD is focusing on key areas such as order confirmation and payment to build a collaborative ecosystem with suppliers [17]. - Geely has committed to a 60-day payment term and will not use practices that increase supplier financial pressure [18]. - Great Wall is committed to timely payments and optimizing payment processes to maintain a healthy supplier relationship [21]. - Seres calls for industry self-discipline to enhance supply chain resilience and competitiveness [23]. - NIO aims to establish long-term, mutually beneficial relationships with partners to ensure product quality and user experience [26]. - Li Auto and Xpeng both reaffirm their commitment to a 60-day payment term and efficient payment processes to support their partners [28][30]. - Leap Motor is dedicated to implementing the initiative and ensuring supply chain stability [32]. - Xiaomi emphasizes the importance of timely payments as a fundamental respect for partners and aims to enhance supply chain resilience [35].

Investment Rating - The report maintains a "Positive" investment rating for the automotive and automotive parts industry [7]. Core Insights - The "Automotive Industry Stability Growth Work Plan (2025-2026)" was issued by the Ministry of Industry and Information Technology and seven other departments on September 12, 2025. The plan aims to enhance the quality and reasonable growth of the automotive industry from both supply and demand sides, promote the industrial application of intelligent connected technology, and conditionally approve the production access of L3 level vehicles [2][4]. - The gradual implementation of policies and regulations is expected to accelerate the growth of advanced intelligent driving. The concept of "equal rights for intelligent driving" is likely to reassess the value of complete vehicles, with intelligent driving becoming a new opportunity for reshaping the market following electrification. Strong intelligent driving vehicles are anticipated to capture a larger market share while enhancing their AI capabilities through data accumulation, thus driving investment opportunities in core segments of the industry chain [2][4]. Summary by Sections Policy and Market Outlook - The plan targets achieving approximately 32.3 million vehicle sales in 2025, a year-on-year growth of about 3%, with new energy vehicle sales expected to reach around 15.5 million, reflecting a year-on-year increase of about 20%. The automotive export is also projected to maintain stable growth [4]. Intelligent Driving Development - The report emphasizes the push for the industrial application of intelligent connected technology, with L3 level intelligent driving expected to accelerate. The plan encourages the approval of intelligent connected vehicles and the establishment of pilot programs for road access, alongside improvements in legal frameworks related to traffic safety insurance [4]. Investment Opportunities - The report identifies two main lines of investment opportunities: 1. **Functionality Enhancement**: The continuous exploration of intelligent driving capabilities and the reduction of costs associated with high-level intelligent driving systems are expected to enhance consumer appeal [4]. 2. **Cost Reduction**: Technological advancements are anticipated to lower the costs of intelligent driving systems, with companies like Xiaopeng and BYD leading the charge in making intelligent driving more affordable [4]. Recommended Companies - The report recommends several companies for investment, including: - **Complete Vehicle Manufacturers**: Xiaopeng Motors, Great Wall Motors, Geely, BYD, Xiaomi Group, Leap Motor, Li Auto, SAIC Motor, and Changan Automobile [4]. - **Parts Suppliers**: Top Group, Bertel, and Xingyu Co., with a focus on companies like Desay SV and Coboda [4].

Core Viewpoint - The China Automotive Industry Association (CAIA) has released a payment initiative for supplier accounts, which has been supported by 17 major automotive companies, aiming to promote high-quality development in the automotive industry [1][2]. Group 1: Initiative Details - The initiative outlines requirements for goods delivery acceptance, payment terms, reconciliation, and payment processes, specifying that the payment period for automotive companies (the buyer) should not exceed 60 calendar days from the date of delivery and acceptance by the buyer [1]. - The initiative is expected to alleviate financial pressure on suppliers, which is crucial for fostering innovation and building a robust supply chain in the automotive sector [1]. Group 2: Supporting Companies - The 17 automotive companies that have committed to this initiative include major players such as BYD, Xiaomi, Dongfeng Motor Group, and SAIC Motor Corporation, among others [2]. - These companies have previously made public commitments regarding the payment term of not exceeding 60 days [2]. Group 3: Industry Impact - If effectively implemented, the initiative could enhance cash flow efficiency within the industry, leading to improved production efficiency and overall competitiveness of the Chinese automotive sector [1].

Core Viewpoint - The China Automobile Industry Association (CAAM) has launched an initiative to standardize payment terms for automotive suppliers, establishing a maximum payment period of 60 days from the date of delivery and acceptance of goods by the automaker [1][3]. Group 1: Initiative Details - The payment period starts from the date the supplier's goods are delivered and accepted by the automaker, with a maximum of 60 calendar days [1][3]. - Automakers are encouraged to establish long-term cooperative relationships with suppliers, with contracts having a minimum validity of one year [1]. - The initiative outlines key processes including order confirmation, delivery and acceptance, and payment and settlement [3]. Group 2: Industry Response - 17 automakers have publicly committed to implementing the payment initiative, including major companies like Dongfeng Motor, SAIC Group, and BYD [2][6]. - Automakers such as BYD emphasize the importance of adhering to the initiative to ensure supplier rights and stabilize supply chain expectations [6]. Group 3: Specific Policies from Automakers - Chery Group has introduced a four-pronged approach to standardize payment terms and reduce average payment periods for suppliers [7]. - Changan Automobile has implemented a payment scheme that starts counting from the delivery date, successfully fulfilling the 60-day payment commitment [7]. - Great Wall Motors has committed to using bank transfers and bank acceptance bills exclusively for payments, avoiding electronic vouchers [7].

Core Viewpoint - The "60-day payment commitment" initiative among 17 automotive companies continues to evolve, with the China Automotive Industry Association releasing the "Payment Norms Initiative for Automotive OEMs and Suppliers" on September 15, which aims to standardize payment terms and enhance supplier rights [1][3]. Group 1: Initiative Details - The initiative specifies that payment terms should not exceed 60 calendar days from the date of delivery and acceptance by the OEM [3]. - It encourages cash payments or bank acceptance bills, especially for small and medium-sized enterprises, to alleviate financial pressure on suppliers [5][6]. - The initiative includes provisions for advance payments based on previous contract prices if pricing agreements are not reached [5]. Group 2: Industry Response - Major automotive companies such as Dongfeng, Changan, and SAIC have committed to implementing the initiative, ensuring supplier rights and stabilizing expectations within the supply chain [6][8]. - The Ministry of Industry and Information Technology emphasized the importance of this initiative for promoting healthy and sustainable development in the automotive industry [8]. Group 3: Market Impact - Following the announcement of the initiative, automotive stocks saw significant gains, with several companies reaching their daily price limits [3]. - In the Hong Kong market, shares of electric vehicle manufacturers like NIO and BYD also experienced notable increases [4]. Group 4: Historical Context and Future Outlook - Since the initial "60-day payment commitment" declaration in June, some companies have already begun to optimize their payment terms, with reports indicating that several firms have successfully implemented the 60-day payment policy [9]. - The Ministry of Industry and Information Technology has previously issued guidelines to regulate payment terms in the automotive sector, highlighting the ongoing challenges in achieving compliance across the industry [9][10].

Core Viewpoint - The automotive industry is experiencing a strong performance, with several companies' stocks hitting the limit up, indicating positive market sentiment and potential growth opportunities [1]. Industry Summary - The automotive index closed at 16,659.06, with a trading volume of 17.1 billion and a turnover of 35.583 billion, reflecting a 2.31% increase [2]. - The China Automotive Industry Association has issued a payment standard initiative aimed at ensuring fair payment practices between vehicle manufacturers and suppliers, promoting a collaborative ecosystem [4]. - The initiative encourages long-term stable partnerships between manufacturers and suppliers, with contracts lasting no less than one year [4]. Company Responses - Chery Group has committed to adhering to the payment standards and ensuring compliance with the initiative [6]. - Li Auto has reaffirmed its commitment to a 60-day payment period for suppliers, emphasizing timely delivery and settlement [8]. - Seres has expressed support for the initiative, advocating for self-discipline among companies to foster high-quality industry development [10]. - Changan Automobile has successfully implemented the 60-day payment commitment and developed an efficient payment process for suppliers [12]. - GAC Group has pledged to uphold its commitments to suppliers and promote healthy development across the supply chain [14]. - BYD has committed to implementing the initiative and focusing on key contract elements to enhance collaboration with partners [16]. - NIO has expressed its dedication to building a mutually beneficial relationship with suppliers, emphasizing the importance of a healthy supply chain [18][19]. - Xiaomi Auto has reiterated its commitment to the 60-day payment period and aims to enhance supply chain resilience [21]. - SAIC Group has standardized its supplier payment period to 60 days and will avoid practices that increase financial pressure on suppliers [23][24]. - XPeng Motors has committed to maintaining the 60-day payment period and ensuring efficient operations with partners [26]. - Leap Motor has pledged to support the initiative and ensure supply chain stability [28][29]. - Geely Auto Group has expressed its commitment to implementing the initiative in key operational areas [31].