Investment analysts are rallying around a few potential winners in China’s auto market as fierce competition begins in earnest at Beijing’s 10-day auto show. The opening morning of China’s biggest car show of the year, in this case his April 25th, is usually packed. However, this time, due to the large number of people and vehicle announcements, movement between booths was often very slow. In contrast to previous years when it was empty, the second day turned out to be not so good. “Attendance this year has been overwhelming,” Nick Lai, head of China equity research and Asia-Pacific auto research at JPMorgan, said in a late April report, adding that live streamers and overseas dealers at the show He pointed out that the number of participants had increased. “This year, I realized that[d] Analysts at JPMorgan say there are a significant number of foreign tourists who are overseas dealers and importers of Chinese brands, and the overseas market could account for about a quarter of major manufacturer BYD’s auto profits this year. I predict that there will be. Tesla expects to win more than a fifth. The company, which accounts for the majority of sales in China, has not exhibited at major auto shows since protesters disrupted its booth in 2021, but CEO Elon Musk recently During a surprise visit to Beijing, the company overcame data security hurdles in local car sales. “Although China’s car market is about 50% larger than Europe’s, there are about 170 brands active in the market compared to Europe’s 80 brands, which clearly suggests an oversaturation of the car market.” JP “The market has weak economies of scale, with around 150,000 cars sold per brand compared to around 200,000 in the EU,” Morgan’s European auto analysts said in a separate report last month. “This has led to unreasonable competition.” “From internal combustion engines to battery electric vehicles, it begs the question whether international OEMs, including premiums, should compete in the entry and compact segments, respectively, over the next five years,” the report said. Open to the public After two days of restricted entry to businesses and media, the Beijing Motor Show is now open to the public. Car companies then competed to attract consumers, not just by offering coffee and prizes. Porsche and Geely-backed Zeekr both showed off their Apple Vision Pro experience. This device is not yet available in China. Brands from Japanese automaker Mazda to Chinese EV startup Nezha hired musicians and dancers to perform, and even held short car-focused fashion shows. Often, seconds before a show ended, organizers removed barriers to allow audience members to run up to cars and performers. Self-driving supplier Asensing attended the auto show to showcase its sensors and chips to support its global expansion, as well as learn the latest industry trends, said Zhang Haizhou, senior brand and public relations director. , “The next car most people use is set to be smarter.” More than 110 new car models debuted at the Beijing Auto Show, according to organizers. “Auto shows have become a marketing tool for top brands to attract attention not only through their products but also through their vocal management,” Morgan Stanley’s Asia-Pacific auto analysts said in a note last week. “EV manufacturers stole the show, especially the founders of brands such as Xiaomi and BYD,” they said. There was information that Xiaomi founder Lei Jun was walking through the exhibition center on the morning of April 25th after giving a speech to promote his company’s new electric sedan “SU7”. “Xiaomi was one of the surprising standout companies with the highest number of social media hits for SU7 and Chairman Lei Jun,” auto stock analysts at Jefferies said in a May 1 report. “We learned that marketing is important and that it is enriching. [Xiaomi’s] The smartphone and consumer electronics company announced that it delivered 7,058 SU7 units in April, when deliveries began. Nio and Zhejiang-based Leap Motor reported better-than-expected deliveries in April, according to Bank of America Merrill Lynch analysts say Nio stock has risen more than 50% from its mid-April lows. “I believe orders will improve,” he said. [month-over-month] In May, thanks to you, [a] “Trade stimulus measures were announced on April 26,” BofA analysts said in a separate report. New energy vehicles and some fuel-powered vehicles could be eligible for subsidies of about $1,000 or more, Jefferies analysts said. We predict that there is a possibility that the number of units will increase evenly by 1 million units. The report suggests new energy vehicle penetration will rise to 45% from 44% previously, analysts said.Hong Kong-listed Leap Motor, which was rated a buy as of Friday’s close, said , Geely, and BYD as Chinese auto stocks. Leap Motor was the biggest lifter for Jefferies’ price target, while JPMorgan’s top picks also include BYD and Leap Motor, which are potential beneficiaries of government stimulus. However, analysts predict that Geely and Xiaopeng “could earn almost 20%.” The focus on Chinese automakers shows that foreign companies are losing out. “During the investor day in Beijing ahead of the auto show, [ Volkswagen ] The Jefferies report notes that “management believes that VW, like most foreign OEMs, misjudged changes in consumer demand and that the Chinese domestic industry was more in sync with consumer trends and more cost competitive.” We honestly evaluated whether we missed the appearance of Jefferies also rates Volkswagen and its local electric vehicle partner Xpeng as buys, but only Tesla and Toyota Motor Corporation are rated as holds. —CNBC’s Michael Bloom contributed to this report.
