According to Zhito Finance APP, China Merchants has released a research report stating that the air suspension system is a significant breakthrough in the Automotive Suspension Industry since the advent of independent suspension, effectively filtering and reducing road vibrations. For Electric Vehicles, it can maintain ground clearance, reduce wind resistance, and protect the Battery; for Commercial Vehicles, it can help heavy trucks reduce impact losses on the road during driving, extending the lifespan of highways; for passengers, it can enhance the comfort of riding and the handling experience of driving. The domestic air suspension solutions are becoming mature, and in the future, air suspension will gradually spread from high-end luxury models to mid-range models, with market demand continuing to grow.

The main points of China Merchants Securities are as follows:

Various active suspension solutions are blossoming, with air spring + CDC damper solutions being the mainstream.

Fully active suspension is one of the important future trends in automotive suspension; several mainstream active suspension solutions are flourishing in the market, mainly categorized into air suspension solutions, hydraulic suspension solutions, and electromagnetic suspension solutions, with a diverse configuration landscape; currently, the main solutions for active suspension still mostly consist of air suspension + CDC solutions.

Moreover, domestic air suspension technology is continuously iterating, with single-chamber & multi-chamber, open & closed chamber solutions gradually realizing localization, allowing manufacturers to select based on vehicle positioning.

Localization + scaling promotes cost reduction, and the penetration rate of the air suspension market is expected to continue increasing.

(1) Unit value: According to data from Gaishi Autos, before 2020, due to air suspension mainly relying on imports, the price of a single air suspension system was around 12,000 yuan. In recent years, as core components such as air springs, air compressors, and air supply units have been domestically produced, the price of the complete air suspension system has gradually decreased, reaching around 9,000 yuan by 2021. With the ongoing process of localization, there is room for further cost reduction in air suspension in the future.

(2) Penetration rate: According to data from Gaishi Autos, the domestic air suspension deployment was only 0.238 million vehicles in 2022, with a penetration rate of only 1.2%. In 2023, the sales volume of new cars equipped with standard air suspension is about 0.564 million vehicles, with a year-on-year growth rate of 137%, raising the penetration rate to 2.7%. In 2024, the penetration rate surged to 4.4% by June, and is expected to further increase by the end of 2025.

Following the trend of electrification and Asia Vets, the market scale is expected to grow rapidly.

(1) In terms of product characteristics, air suspension is more compatible with Electric Vehicles, as the core three-electric system on the Electric Vehicles chassis is more sensitive to chassis height and overall vehicle NVH. The height adjustability and ride smoothness provided by air suspension can better protect the core systems of the vehicle and can timely adjust chassis height to reduce wind resistance and lower energy consumption.

(2) From the perspective of consumer trends, according to data from the China Association of Automobile Manufacturers, at the threshold of 0.2 million yuan, the sales proportions of traditional fuel passenger vehicles priced above 0.2 million yuan in 2022, 2023, and the first half of 2024 are respectively 29.3%, 28.8%, and 27.3%, indicating a tendency for traditional fuel passenger vehicles to develop below 0.2 million yuan; whereas for Electric Vehicles, the sales proportions of models priced above 0.2 million yuan are 37.8%, 42.2%, and 43.5%, with a notable increase in sales of mid-to-high-end Electric Vehicles. Currently, there are models with air suspension as standard in the 0.3-0.4 million yuan price range, and it has gradually started to be an option in the 0.2-0.3 million yuan range, mirroring the trend of electrification and higher-end development in passenger vehicles.

(3) In terms of market scale, according to data from Gaishi Autos, the air suspension market size is expected to approach 38 billion by 2025.

Domestic suppliers are continuously breaking through in technology and are paying attention to related symbols in the Industry Chain.

Although domestic manufacturers have entered the air suspension business relatively late, several core companies such as Konghui, Shanghai Baolong Automotive Corporation, Anhui Zhongding Sealing Parts, and Ningbo Tuopu Group already possess corresponding technical strength, and have rapidly increased volume by partnering with new force auto enterprises. The domestic substitution prospects are promising, recommending Ningbo Tuopu Group (601689.SH) and Shanghai Baolong Automotive Corporation (603197.SH), while suggesting attention to Anhui Zhongding Sealing Parts (000887.SZ) and others.

Risk warning: risks of intensified competition in the Industry market, risks of changes in market technology routes, risks of penetration rate growth not meeting expectations, etc.