Investment Rating - The report does not explicitly provide an investment rating for the automotive industry or specific companies within it. Core Insights - The adjustment of the ultra-luxury vehicle consumption tax aims to promote rational consumption and optimize the tax structure, with the threshold lowered from Rmb1.3 million to Rmb900,000, affecting both new energy vehicles (NEVs) and traditional luxury vehicles [1][9]. - The new tax policy is expected to significantly increase the purchase cost of ultra-luxury vehicles, dampening demand in the Rmb900,000–1.3 million price range, which accounted for only about 20,000 units sold in the first half of 2025 [2][10]. - Domestic NEV brands are presented with a historical opportunity to capture market share in the high-end segment, while imported brands like Porsche face significant challenges due to their reliance on models priced within the affected range [3][12]. Summary by Sections Tax Policy Changes - The consumption tax for ultra-luxury vehicles has been adjusted to include a 10% tax at the retail stage, while NEVs remain exempt from production-stage taxes, leading to a lower overall tax burden for NEVs compared to traditional fuel vehicles [2][11]. - Second-hand ultra-luxury vehicles are exempt from the consumption tax, which may stimulate the used car market and encourage consumers to opt for these vehicles to avoid new tax burdens [2][11]. Market Impact - The new tax policy is expected to further squeeze the market share of high-end imported brands, particularly Porsche, which saw a 49% year-on-year decline in sales in the first half of 2025 [3][12]. - Traditional luxury brands such as Mercedes-Benz and BMW are also anticipated to face pressure, with the pricing center for high-end NEVs expected to shift towards the Rmb500,000–600,000 range [3][12]. Strategic Adjustments - Imported brands must quickly adapt their strategies, either by reducing prices below Rmb900,000 or enhancing vehicle configurations to maintain competitiveness [4][13]. - Domestic brands, benefiting from tax exemptions, have more flexibility in pricing strategies, allowing them to mitigate the impact of the new tax policy through adjustments in vehicle configurations [4][14]. Fiscal Implications - The expansion of the tax base is projected to increase consumption tax revenue, helping to offset declines in ultra-luxury vehicle sales, with consumption tax revenue in the first five months of 2025 totaling Rmb772.9 billion, up 1.6% year-on-year [5][16]. - The policy encourages automakers to focus on the mid- to low-end NEV market, aligning with the trend of rising NEV price ceilings and discouraging blind expansion into the ultra-premium segment [5][16].

Investment Rating - Investment recommendation: Outperform the market (maintained) [7] Core Viewpoints - The report provides an in-depth analysis of the domestic ultra-luxury automobile market, highlighting the resilience of imported brands and the potential breakthrough of domestic brands. The market share of domestic brands is expected to grow from 0.8% in 2023 to 4.8% in 2024 [4][9][25]. - The ultra-luxury SUV market is highly competitive, with Porsche Cayenne leading, while domestic brand Yangwang U8 is starting to gain recognition. Imported brands dominate the ultra-luxury sedan market, but new high-end models from domestic brands like Yangwang U9 are entering the market [4][10][40]. - The ultra-luxury MPV market is led by Toyota Alphard, with domestic brand Zeekr 009 gradually making inroads [4][10]. Summary by Sections 1. Resilience of Imported Ultra-Luxury Cars and Structural Breakthrough of Domestic Brands - The overall sales of ultra-luxury cars remain resilient, with annual sales maintaining above 200,000 units. In 2024, the expected sales volume is approximately 200,000 units, a decrease of 15.2% year-on-year [9][21]. - Imported brands continue to dominate the market, but domestic brands are gradually increasing their market share, projected to rise from 0.8% in 2023 to 4.8% in 2024 [25][28]. 2. Intense Competition in Various Sub-Markets and Differentiation of Domestic Brands - The ultra-luxury SUV market is stable, with sales expected to reach 112,000 units in 2024, down 13.2% year-on-year. The top five models include Porsche Cayenne, Land Rover Range Rover, and Yangwang U8, with respective sales of 21,000, 19,000, and 7,000 units [30][32]. - The ultra-luxury sedan market is primarily dominated by imported brands, with 2024 sales expected to drop to 66,000 units, a 22.4% decrease year-on-year. However, domestic brands like Yangwang U9 and NIO ET9 are beginning to penetrate this market [40][42]. - The ultra-luxury MPV market is led by Toyota Alphard, with Zeekr 009 starting to gain traction, achieving over 2,000 units in sales in 2024 [51]. 3. Investment Recommendations: Focus on "New Luxury" Domestic Brands with Leading Smart Electric Technology - Domestic brands are expected to leverage advancements in electric and smart technologies to penetrate the ultra-luxury market. In 2024, China's new energy vehicle sales are projected to reach 12.87 million units, a 35.5% increase year-on-year [54][55]. - The report recommends focusing on brands like Yangwang from BYD and the joint venture brand Zunji from Jianghuai Automobile and Huawei, which are positioned to lead the high-end market [54][55].