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ClaireYuan
Director
StephenChan
AssociateDirector
ChinaManufacturingTeamCorporateRatings
October10,2023
ChinaAuto:
SoftDemandHeightensCompetition
Thisreportdoesnotconstiutearatingaction
KeyTakeaways
·Whatdoweexpectoverthenext12months?
·Chinasdomesticlightvehiclesalestoincreaseby0%-2%in2023-2024.
·Growthindomesticelectricvehiclesaleswilldecelerateto15%25%overtheperiod.
·Downsiderisks:
·Macroheadwindscastuncertaintyonlightvehicledemand.
·Prolongedpricewarsandrisingelectrificationweighoncarmakersmarginsandcashflows.
·TradehurdleswouldcomplicateChinesecarmakersexpansionoverseas.
·Rngraderissi4.3%inthefirsthalfof2023.
·ThepositiveratingoutlookonCATLreflectsourexpectationofimprovingbusinessstrengthandsustainednetcashposition.
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WeseeratingbuffersforBeijingAuto,BAICMotor,JohnsonElectric,andYanfengInternational.
·
·Chinasdomesticlightvehicle(LV)
salescouldrise0%-2%in2023-2024.
·Unitsalesinthefirsteightmonthsthisyearwerelargelyflat.
·Continuouspricecuts,betterseasonalitywillsupportsalesfortherestoftheyear.
·Softconsumersentimentamidmacroheadwindswillconstraingrowthin2024.
·Salesgrowthofdomesticelectriclightvehicleswilllikelydeceleratetoc.15%-25%over2023-2024.
·Saleswereupabout30%(excluding
exports)inthefirsteightmonthsthisyear.
·Improvingproductofferingsandpurchaseincentivescontinuetosupportrising
electricvehicle(EV)adoption.
·EVpenetrationcouldrisetoward40%by2025.
SPGlobal
Ratings
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