Core Viewpoint - UBS recently released a research report on the Chinese automotive industry, suggesting that the trend against "involution" is positive for industry profit margins and stock market sentiment, assigning buy ratings to CATL, BYD, Li Auto, Great Wall Motors, and Seres [1] Industry Summary - Signs of price competition easing have been observed, including adjustments in sales guidance by Li Auto and limited sales achievements by XPeng and NIO [2] - BYD's production in June was approximately 10% lower than its wholesale volume and 20% lower than its retail volume, indicating a restraint in production [2] - The central government has called for avoiding a vicious cycle of low-price competition, with media outlets urging the industry to follow reasonable economic laws [2][3] Profit Margin Impact - While a sudden shift from intense competition to orderly consolidation is hard to imagine, there is potential for a temporary halt in price wars [3] - Consumer behavior may be influenced by inflation expectations, potentially accelerating car purchase decisions if prices are anticipated to rise [3] Stock Market Impact - The news is viewed positively for industry profit margins and stock market sentiment, despite it being too early to calculate the impact on earnings [4] - Concerns over price competition have persisted since BYD initiated a new round of price cuts on May 23 [4] - Buy ratings have been assigned to CATL, BYD, Li Auto, Great Wall Motors, and Seres based on various valuation methods including PE, EV/sales multiples, DCF, and SOTP [4] Company-Specific Insights BYD - Valuation is conducted using SOTP, with each business segment valued by EV/sales multiples [6] - Downside risks include changes in favorable policies for new energy vehicles and sudden price changes in key raw materials [6] Li Auto - Valuation is based on the price-to-sales method [7] - Key risks include weaker-than-expected demand due to economic slowdown and increased raw material costs [7] CATL - Target price is derived from PE multiples [8] - Downside risks include geopolitical issues affecting exports and price competition among industry peers [8] Great Wall Motors - Valuation is based on PE methods, considering historical performance and growth prospects [9] - Downside risks include industry slowdown and intensified competition [9] Seres - Valuation is based on PE methods [11] - Downside risks include weaker-than-expected demand for high-end vehicles and increased competition in the EREV segment [11]

Core Viewpoint - The automotive industry is experiencing significant pressure, prompting calls for manufacturers to optimize rebate policies and shorten the rebate payment period to alleviate financial strain on dealers [1][2]. Group 1: Rebate Policy Issues - The All-China Federation of Industry and Commerce Automotive Dealers Chamber has highlighted the importance of timely rebate payments from manufacturers to dealers, which is crucial for improving dealers' financial conditions [1]. - A survey of 42 automotive brands revealed multiple issues with rebate structures, including complexity, significant differences in payment periods among brands, and restrictions on the use of rebates [1][2]. Group 2: Dealer Financial Strain - A report from the China Automobile Circulation Association indicates that 84.4% of automotive dealers are experiencing varying degrees of price inversion, with 60.4% facing price inversions exceeding 15%, severely impacting their liquidity [2]. - The automotive dealership sector is capital-intensive, requiring substantial upfront payments to manufacturers, and delays in rebate payments can exacerbate financial pressures on dealers [2]. Group 3: Industry Response - In response to these challenges, several manufacturers, including GAC Group, BMW, and SAIC General Motors, have committed to ensuring rebate payments are completed within 60 days, marking a positive shift in the industry [2].

Core Viewpoint - Recent regulatory actions to halt high-interest and high-rebate automotive financing are expected to tighten terminal price discounts for automotive brands, leading to potential price increases for various models [1][2]. Group 1: Regulatory Changes - Regulatory bodies in regions such as Beijing, Sichuan, and Henan have mandated banks to reduce car loan rebate ratios to below 4%, with annual interest rates decreasing from 6.5% to 3.2% [3]. - The adjustments in policies are rapidly affecting the terminal market, with significant price increases observed for models like the BMW i3 and reductions in discounts for mainstream models such as the Mercedes-Benz C-Class and Audi A4L [4]. Group 2: Market Dynamics - The luxury car market has seen substantial price fluctuations due to intense competition, with dealerships relying on after-sales and automotive finance for profitability rather than new car sales [2]. - The "high-interest high-rebate" model, where banks provide significant loan rebates to dealers, has led to a distorted pricing system and hidden financial risks in the market [2][4]. Group 3: Consumer Impact - Current market conditions still offer considerable discounts, with models like the BMW 3 Series and Audi A4L having discounts up to 13.2 million and 14.8 million respectively, despite the tightening of financing options [4]. - While high rebates have temporarily benefited consumers, the long-term sustainability of such practices is questioned, as they may degrade the service capabilities of financial institutions and ultimately affect car sales [4]. Group 4: Industry Trends - The automotive industry is experiencing a shift away from chaotic price wars, with various industry bodies advocating for a reduction in "involution" and a move towards sustainable and high-quality development [5].

Core Viewpoint - The automotive industry is taking significant steps to combat "involutionary" competition by standardizing payment terms to suppliers, committing to a maximum payment period of 60 days, which is expected to enhance financial stability for small and medium-sized enterprises [1][2][4]. Group 1: Industry Response - Major automotive manufacturers, including China FAW, Dongfeng Motor, and GAC Group, have pledged to limit supplier payment terms to 60 days, with over 17 companies making similar commitments by June 13 [1][3]. - The initiative is seen as a response to the pressures of price wars in the automotive market, which have reduced profit margins from 8% in 2017 to an estimated 4.3% in 2024, and further down to 3.9% in Q1 of this year [3][4]. Group 2: Impact on Supply Chain - The standardization of payment terms is expected to facilitate efficient cash flow for suppliers, particularly small and medium-sized enterprises, and promote collaboration across the supply chain [2][5]. - The automotive industry has been criticized for extending payment periods, which has exacerbated financial pressures on upstream suppliers, such as those in the steel industry [3][6]. Group 3: Regulatory Framework - The recent implementation of the "Payment for Small and Medium Enterprises Regulation" mandates that large enterprises must pay small and medium enterprises within 60 days of delivery, prohibiting the use of commercial bills to extend payment periods [4][6]. - The Ministry of Industry and Information Technology supports the automotive sector's commitment to these payment terms and encourages the establishment of stable partnerships between large and small enterprises [8]. Group 4: Future Considerations - While the commitment to a 60-day payment term is a positive step, there are concerns regarding the actual implementation and the handling of historical payments that exceed this period [5][6]. - Ongoing regulatory efforts aim to address issues of delayed payments and ensure compliance with the new standards, which are crucial for fostering a healthier business environment in the automotive sector [7][8].

Core Viewpoint - The automotive industry is moving towards a healthier and more sustainable development model, with a focus on improving product quality and reducing price wars, as evidenced by commitments from various car manufacturers to expedite rebate payments to dealers within 60 days [1][2]. Group 1: Dealer Rebate Acceleration - GAC Group has announced a commitment to complete dealer rebate payments within two months, responding to the call from the China Automobile Dealers Association to promote healthy industry development [1]. - Other car manufacturers, including BMW, BAIC New Energy, SAIC General, FAW Audi, and Yueda Kia, have also pledged to provide dealer rebates within 60 days [1]. - Dealers have faced challenges due to price wars and reduced rebates from manufacturers, leading to tight cash flow and operational difficulties [4][5]. Group 2: Market Dynamics and Consumer Behavior - The automotive market is experiencing a shift towards high-quality products, with government policies like the vehicle trade-in subsidy stimulating consumer demand [8]. - As of May 11, 2025, the number of applications for vehicle trade-in subsidies reached 3.225 million, indicating strong consumer interest [8]. - Recent announcements from various cities regarding the suspension of trade-in subsidies have raised concerns, but they are viewed as temporary measures rather than permanent terminations [9]. Group 3: Industry Competition and Quality Focus - The competition in the automotive sector is transitioning from price-based to quality-based, with industry leaders advocating for technological advancements over price cuts [10]. - The penetration rate of L2-level new cars reached 55.7% in the first half of 2024, reflecting consumer demand for advanced technology in vehicles [10]. - Regulatory bodies are increasing efforts to address "involution" in the industry, aiming to stabilize the supply chain and enhance product quality [10].

Core Viewpoint - GAC Group has committed to ensuring that dealer rebates are completed within two months, responding to the challenges faced by automotive dealers and promoting high-quality development in the automotive industry [1][6]. Group 1: Industry Challenges - Despite a surge in automotive sales, dealers are experiencing significant financial strain, with 84.4% reporting varying degrees of price inversion and 60.4% facing price inversions exceeding 15% [5]. - The high operating costs and declining quality of sales leads have exacerbated the financial difficulties for dealers, leading to multiple closures and threatening consumer rights and brand image [5][6]. - The automotive industry is facing a "sell more, lose more" phenomenon, driven by supply-demand imbalances and intensified competition, particularly in the context of the transition to new energy vehicles [5][6]. Group 2: Industry Responses - Major automotive companies, including GAC Group, have collectively committed to standardizing supplier payment terms to a maximum of 60 days, aiming to enhance cash flow and alleviate financial pressures within the supply chain [4][7]. - The Ministry of Industry and Information Technology has emphasized that the 60-day payment term is a response to national calls for sustainable development and is crucial for the health of the automotive supply chain [8]. - The China Automotive Industry Association has called for fair competition and adherence to legal regulations to prevent harmful price wars that threaten industry profitability and consumer rights [10].

Core Viewpoint - The Chinese government, through various ministries, has implemented a series of measures aimed at stabilizing the automotive supply chain and promoting high-quality development in the industry, including a commitment from several domestic automakers to reduce supplier payment terms to within 60 days, marking a significant shift in the competitive landscape of the automotive industry [1][3][10]. Group 1: Policy Changes - The new regulation, effective June 1, 2025, sets a maximum payment term of 60 days for large enterprises and establishes a national complaint platform for overdue payments, with penalties for non-compliance [3][5]. - The regulation aims to shift automotive manufacturers from "squeezing competition" to compliant operations, potentially ending the "payment black hole" and restoring the health of the supply chain ecosystem [3][6]. Group 2: Current Industry Practices - Many domestic automakers have historically extended payment terms, with some suppliers reporting payment periods exceeding 200 days, and certain companies using a combination of payment terms and commercial bills to delay payments for over 8 months [4][5]. - The practice of treating suppliers as "interest-free funding pools" has been prevalent, allowing manufacturers to alleviate financial pressure from price wars [3][4]. Group 3: Supplier Impact - Suppliers are expected to benefit from the new 60-day payment term, which could significantly improve cash flow and accelerate technological advancements, as evidenced by a case where a supplier's cash turnover rate improved 2.5 times after reducing the payment cycle from 210 days to 60 days [6][10]. - However, concerns remain regarding the actual implementation of the 60-day term, as some suppliers fear that manufacturers may still resort to financial instruments like commercial bills, effectively prolonging payment periods [7][9]. Group 4: Industry Outlook - The enforcement of the 60-day payment term could lead to short-term liquidity challenges for many domestic automakers, particularly new entrants with tight cash flows, while established players may face less impact due to their existing practices [9][10]. - The shift towards a standardized payment term is seen as a critical step in transforming the competitive dynamics of the automotive industry, potentially reducing price wars and fostering a healthier market environment focused on quality and innovation [11][12].

Core Viewpoint - The automotive industry is responding to national calls to unify payment terms to suppliers within 60 days, addressing long-standing issues of delayed payments and cash flow challenges faced by suppliers [1][7][9]. Group 1: Industry Response - GAC Group was the first to announce the commitment to a 60-day payment term for suppliers on June 10 [2]. - Following GAC, major state-owned enterprises like FAW and Dongfeng also made similar announcements, emphasizing their responsibility and leadership in the industry [3]. - Other leading companies such as Seres, Geely, Changan, and BYD quickly followed suit, indicating a collective industry shift towards shorter payment terms [4][5]. Group 2: Payment Terms Context - Historically, the average payment cycle for domestic automotive companies has exceeded 170 days, with some companies reaching over 240 days, contrasting sharply with international counterparts like Toyota and Ford, which average around 54 to 64 days [10][11]. - The long payment terms have been attributed to intense market competition, where manufacturers have used suppliers as a "zero-interest funding pool" to alleviate their financial pressures [10][19]. Group 3: Regulatory Framework - The revised "Regulations on Guaranteeing Payment to Small and Medium Enterprises" came into effect on June 1, aiming to address issues of prolonged payment cycles and unclear responsibilities [21][22]. - The new regulations include a rigid 60-day payment requirement and prohibit non-cash payment methods that could extend payment periods, aiming to create a more equitable environment for suppliers [31]. Group 4: Market Implications - The shift to a 60-day payment term is expected to enhance the resilience of the supply chain, reducing the risk of cash flow crises for suppliers and improving overall liquidity in the industry [25][28]. - However, this change may impose greater financial pressure on automotive manufacturers in the short term, as they adapt to the new payment structure [24][26]. Group 5: Industry Sentiment - There is a mix of optimism and skepticism among industry stakeholders regarding the implementation of the 60-day payment term, with many questioning the actual enforcement and potential loopholes [29][30]. - The sentiment reflects a broader concern about trust and confidence in the industry's ability to adhere to the new regulations and genuinely improve supplier relationships [29][32].

Core Viewpoint - The automotive industry is collectively responding to the "involution" phenomenon by unifying supplier payment terms to within 60 days, marking a significant shift in supply chain management and compliance with new national regulations [1][10][14]. Group 1: Industry Response - GAC Group initiated the movement by emphasizing the link between supply chain health and product quality, committing to a payment term of no more than 60 days [2]. - China FAW followed suit, highlighting its commitment from a national strategy perspective and outlining specific measures to enhance processes and technology [4]. - Dongfeng Motor, as a representative of the industry, stated that the unified payment term is a response to national policies and reflects its role in the supply chain [6]. - New energy vehicle representative, Seres, reiterated its consistent practice of a 60-day payment term and called for industry self-discipline [8]. - Other major players like Changan Automobile and Geely also joined the initiative, further solidifying the collective commitment to the 60-day payment term [10]. Group 2: Underlying Issues - The collective statements from multiple automakers are a response to long-standing frustrations within the automotive supply chain, as highlighted by a public letter from a supplier that expressed the desire for timely payments [12]. - The competitive pressure has led to extended payment terms, with some companies reporting accounts payable turnover days exceeding 90 days, and in some cases, reaching 120 days or more [12]. - The chaotic competition has drawn regulatory attention, with recent government regulations mandating that large enterprises must complete payments to small and medium-sized enterprises within 60 days [13]. Group 3: Future Implications - The unified commitment to a 60-day payment term is seen as a critical step towards rationalizing competition in the automotive market, potentially alleviating the pressure on suppliers and improving their cash flow [14]. - This collective action signifies a major shift in supply chain management philosophy within the automotive industry, moving towards a healthier ecosystem [14]. - The initiative may represent a turning point for the Chinese automotive industry, transitioning from a "zero-sum game" to a "win-win" scenario, supported by both policy guidance and industry self-regulation [14].

实际上，就在这场论坛开幕前的一周内，中国汽车工业协会（以下简称"中汽协"）、工业和信息化部、 全国工商联汽车经销商商会、商务部等部门和行业商协会也曾先后就"反对汽车行业'内卷式'竞争"发表 倡议或发声。同时，过去的这一周，不少车企负责人也纷纷在各种场合表态要抵制"内卷式"竞争。 当下，"反内卷"已经成为我国汽车行业发展面临的一个关键命题。 —————————— 6月8日，不少市民在重庆国际博览中心逛车展，选购汽车。2025（第二十七届）重庆国际汽车展览会6 月7日-15日在重庆国际博览中心举行。中新社记者 陈超/摄 "面对产业发展新趋势和面临的新形势，汽车行业企业应该抛弃低水平、低效率的'内卷式'竞争，将企 业发展理念转到创新驱动、价值驱动、效率驱动上来，实现向价值竞争转变。"追求高质量、高水平的 价值竞争才是汽车产业发展的根本出路。 我国汽车行业从上到下正齐声喊出三个字："反内卷"。 在6月6日开幕的"2025中国汽车重庆论坛"上，包括中国贸促会汽车行业委员会会长王侠，商务部原副部 长陈健，长安汽车董事长、党委书记朱华荣在内的多位产业界人士和专家围绕整治汽车行业"内卷式"竞 争频频发声，他们明确反对"无序内 ...