Caixin News on September 30th (Reporter Zhang Yipeng), "the bull market is here," a keyword search volume has reached a new high in recent years, while the automotive market entering the 2024 "final season" is also closely watched.

On September 30th, according to Caixin data, the turnover of the Shanghai and Shenzhen markets exceeded 1 trillion yuan after 35 minutes of trading, exceeding 410 billion yuan compared to the previous trading day, setting a new record for the fastest trillion. By the midday close, the Chinext index rose more than 11%, crossing the 2100-point mark, with over 1300 stocks in the entire market rising more than 10%. The turnover of the Shanghai and Shenzhen markets in the morning was 1.66 trillion yuan, with a volume of 712.5 billion yuan more than the previous trading day.

Will the stock market rise across the board help the automotive market rebound? On September 30, Chery ICAR released a poster with the words "buy a red car and you will always be lucky", with the main visual being the continuously rising conglomerates index. "The overall rise in the stock market is a short-term warming trend in the capital markets dimension, but a bullish news for various industries in the medium to long term, with the automotive industry being one of them," said an industry insider.

Stable stock market, booming automotive market.

Three days ago on September 26, a day considered a "breath of relief" by many stock investors. At that time, the Shanghai Composite Index returned to the 3000-point mark after 68 trading days, with a turnover of 1162.5 billion yuan in the Shanghai and Shenzhen markets that day, an increase of 5.1 billion yuan from the previous trading day, breaking the trillion mark for the second consecutive day. Over 5100 stocks in the entire market rose, with over a hundred stocks hitting the daily limit.

"The increase in 2024 is definitely more than 100,000 vehicles, the recent policy adjustments have been too rapid." At the recently concluded 2024 World New Energy Vehicle Conference, Cui Dongshu, Secretary-General of the Passenger Vehicle Branch, projected that the domestic retail sales of cars in 2024 would reach 22.3 million units, a 3% year-on-year increase. Among them, the domestic retail sales of new energy passenger vehicles would be 10.4 million units, a 34% year-on-year increase. At the end of last year, the Passenger Vehicle Branch had estimated the domestic retail sales of passenger vehicles in 2024 to be 22.2 million units.

"Looking back over the past decade, there is a certain correlation between the stock market and the automotive market, that is, 'when the stock market is unstable, the automotive market doesn't prosper' as stated by the industry insider. The promotion effect of the stock market rise on consumption is mainly achieved through the wealth effect, improving residents' disposable income and raising income expectations, leading to a higher marginal consumption tendency among residents. However, the release of the stock market wealth effect has a certain lag effect, so the peak increase in car sales will occur after the peak of the stock market."

In the eyes of more industry insiders, this year's car market policy environment is more complex. In addition to the expected 'bull market' effect on the car market, disruptive factors also include adjusting real estate policies, various regions sequentially introducing consumer stimulus policies, and the inherent cyclical factors of the auto market itself.

On the evening of September 29, first-tier cities such as Shanghai, Guangzhou, and Shenzhen successively announced policies to relax the real estate market. The introduction of this series of policies, besides bringing possible investment returns to consumers, will also to some extent 'absorb' some funds flowing to the car market; and the relatively poor liquidity of real estate funds will also lag behind the wealth effect on the car market.

Compared to the uncertainty of the impact of real estate policies on the car market, the direct impact of consumer stimulus policies, which has the most direct influence on consumer purchasing decisions, has already shown its pull effect on the car market.

'Silver October' can be expected, the peak season continues.

On September 29, the Shanghai Municipal Commerce Commission and six other departments issued the 'Shanghai Implementation Rules for Strengthening Support for Car Subsidy Policies for Old-for-New vehicles (Gasoline Cars)', providing a one-time subsidy of 0.012 million yuan for eligible consumers to purchase cars. Before this, many places across the country had upgraded the intensity of subsidies for old-for-new vehicles, including Beijing, Guangdong, Chongqing, Zhejiang, Sichuan, Hubei, Hunan, Heilongjiang, Qinghai and others.

In terms of effect, the overlapping of national and local old-for-new policies has had a very obvious stimulating effect on the car market. Data shows that as of midnight on September 25, the national car scrappage renewal subsidy platform had received over 1.13 million car scrappage renewal subsidy applications, with over 1.68 million registered platform users, and the subsidy application volume continues to grow rapidly. Zhao Chenxin, Deputy Director of the National Development and Reform Commission, predicts that there will be 2 million low-emission standard passenger vehicles phased out by the end of the year.

In the terminal market, in preparation for the upcoming 'Silver October', main manufacturers, dealers, etc., have made various promotional efforts.

On September 30, SAIC Volkswagen announced that from now until October 13, 2024, they will launch activities such as a 2,000 yuan consumer voucher and a maximum of 35,000 yuan for old-for-new subsidies; on the same day, sales personnel at Huawei stores told reporters that the sales of the WEY VV7 have exceeded 0.2 million units in the 12 months since its launch, and currently, the purchase rights for this car extend until October 8. 'The current promotion is very attractive, with the highest benefits up to 38,800 yuan, and there is also a National Day gift of 18,000 yuan for the eleven long holiday.' Sales personnel at Tesla stores also mentioned that purchasing a car before October 31 can enjoy zero interest to drive away with a Tesla Model Y, for a maximum of 5 years, with an initial payment of 79,900 yuan and a minimum daily payment of 95 yuan.

On the dealer side, a salesperson from a Mercedes-Benz 4S store in Shenzhen said that the store recently launched the 'National Day Car Purchase Festival' event, where customers can enjoy up to 15,000 yuan in national trade-in subsidies, up to 15,000 yuan in Shenzhen trade-in subsidies, and up to 15,000 yuan in Mercedes-Benz VIP treatment. A Beijing GAC Toyota 4S store launched the 'Silver Ten VIP Season National Day Super Discount Non-stop' themed consumer promotion event, with trade-in subsidies of up to 35,000 yuan, and all models can enjoy five exclusive gifts for a limited time.

According to the data from the China Passenger Car Association, in the first three weeks of September, retail sales of passenger vehicles increased by 10% year-on-year compared to September last year, and by 10% month-on-month compared to the same period last month. The latest automotive industry weekly report from China Great Wall Securities stated that passenger vehicle retail performance was strong in September, and is bullish on October continuing the 'Golden September, Silver October' peak season trend.