Core Insights - The luxury fuel vehicle market has a premium-seeking consumer base, characterized by brand premium, design premium, and technology premium attributes [1] - In the era of new energy vehicles, competition in the luxury car segment is shifting, with a reduction in the importance of technology attributes and some brands still in the establishment phase; the core focus remains on brand and design [1] - The high-end market's domestic replacement is less affected by market price wars, as the competitive landscape is determined by brand strength; currently, there is a coexistence of incremental demand and domestic replacement, with brand premium and design premium being the two main focuses in the luxury car market during the new energy era [1]

Core Insights - The luxury fuel vehicle market has a premium-seeking nature, characterized by brand premium, design premium, and technology premium [1] - In the era of new energy, competition in the luxury vehicle market is shifting, with a reduction in the importance of technology attributes and some brands still in the establishment phase; the core focus remains on brand and design [1] - The high-end market's domestic replacement is less affected by market price wars, as the competitive landscape is determined by brand strength; currently, there is a coexistence of incremental demand and domestic replacement, with the luxury vehicle market in the new energy era primarily driven by brand premium and design premium [1]

Core Viewpoint - The luxury fuel vehicle market is characterized by a pursuit of premium pricing, driven by brand premium, design premium, and technology premium [1][2][3] Group 1: Luxury Vehicle Market Analysis - The luxury vehicle market is segmented into first-line luxury, second-line luxury, and other luxury brands, with brand premium being the most significant factor [2] - Design premium includes the refinement of products and the rarity of vehicles, which is essential for creating a sense of luxury [2] - Technology premium is derived from critical components such as engines, chassis, and transmissions, with high technical barriers being a core aspect of fuel vehicle pricing [2] Group 2: Changes in the Luxury Vehicle Market in the Era of New Energy - The value system of new energy vehicles differs significantly from that of fuel vehicles, leading to a reduction in technology premium due to the commoditization of high horsepower and the dominance of supply chain companies [3] - The premium in the electric vehicle era is primarily determined by brand and design premiums, as seen in successful models like Huawei's Aito series and Li Auto's L series [3][4] - Domestic electric vehicles struggle to penetrate the ultra-luxury market (over 1.5 million yuan) and have limited presence in the high-end market (over 800,000 yuan) due to the weakened technology premium [3][4] Group 3: Competitive Landscape in the High-End Market - The high-end market is less affected by price wars, as consumers have stronger purchasing power and are less sensitive to tax incentives [4] - High-end vehicle brands cannot engage in price wars without damaging their brand equity, and some brands are still in the process of establishing their market presence [4] - The domestic high-end vehicle market is showing early signs of success, with growth driven by both incremental demand and domestic replacement [4][5] Group 4: Recommendations for Investment - The focus in the new energy high-end market should be on companies with strong brand and product development capabilities, particularly those like Huawei and Xiaomi that have established significant brand equity [5] - Li Auto is highlighted for its strong product development capabilities, particularly with its successful range-extended L series [5]

Investment Rating - The report suggests a positive outlook for companies with strong brand power and product development capabilities in the high-end market of luxury vehicles, particularly focusing on brands like Xiaomi and Huawei [5][4]. Core Insights - The luxury car market is characterized by a pursuit of premium pricing, driven by brand, design, and technology premiums. The transition to electric vehicles has shifted the focus from technology premiums to brand and design premiums [1][2][3]. - In the electric vehicle era, the competitive landscape has changed significantly, with technology barriers being lowered, making brand and design the primary factors for premium pricing [2][3]. - The high-end market is less affected by price wars, as consumers in this segment have stronger purchasing power and are less sensitive to tax incentives [3][4]. Summary by Sections Section 1: Overview of Fuel Luxury Cars - Luxury cars are defined as products from widely recognized luxury brands, typically priced above 200,000 RMB [12][16]. - The market is highly concentrated, with leading brands dominating sales, particularly in the mid-to-high-end segments [24][25]. Section 2: Competitive Characteristics of Fuel Luxury Cars - The market emphasizes brand, design, and technology premiums, with a notable shift towards brand and design in the electric vehicle era [1][2][3]. - The consumer demand for personalized and high-quality experiences is increasing, leading to a focus on product refinement and scarcity [1][2][3]. Section 3: Transition from Fuel Luxury Cars to Electric Vehicles - The pricing and competitive barriers have changed, with technology premiums diminishing and brand and design becoming more critical [2][3]. - New players like Huawei and Xiaomi are emerging as leaders in the electric vehicle high-end market, leveraging their brand strength [2][3][4]. Section 4: Recommendations for Investment - Companies with strong brand power and product development capabilities, such as Xiaomi and Huawei, are recommended for investment [5][4]. - The report highlights the potential of companies like Li Auto, which has shown strong product development capabilities [5][4]. Section 5: Industry Competition - The competition in the automotive and electric vehicle markets is intensifying, with sales not meeting expectations [6].