According to Zhitong Finance APP, China Galaxy Securities released a Research Report stating that looking ahead to 2025, advanced intelligent driving will enter a period of accelerated popularity. "Smart driving equality" will lead to accelerated iteration of supply-side products, the market supply will continue to enrich, and the large models of intelligent driving will impose higher requirements on R&D investment, likely leading to a continued increase in industry concentration. The leading tier is beginning to widen the generational gap in advanced driving capabilities, and the competitive advantage in the market will become increasingly pronounced. Driven by technology and policy, XINXINGCHANYE is expected to usher in rapid development, bringing trillions in market scale increase and new growth opportunities for the entire automotive industry chain, including vehicle manufacturing, intelligent driving components, and chassis components.

中国银河证券主要观点如下：

2024 Review: The trade-in policy drove domestic Consumer, and exports maintained rapid growth.

From January to November 2024, China's automotive market achieved sales of 27.94 million units, a year-on-year increase of +3.7%. In the domestic market, trade-ins generated over 5.8 million trade-in sales, significantly boosting the demand in the Passenger Vehicle market. It is expected that domestic automotive sales in 2024 will increase by 0.7% year-on-year to 25.352 million units. In terms of exports, high-speed growth is maintained, with an expected 18.9% year-on-year increase in automotive export sales to 5.839 million units. The boost in domestic demand, combined with high export growth, will drive steady growth in automotive sales in 2024, with an expected year-on-year increase of 3.6% to 31.192 million units.

2025 Outlook: Consumer encouragement policies are expected to continue, promoting accelerated product iteration in intelligent driving.

In terms of total volume, the trade-in Consumer encouragement policy is expected to continue in 2025, supporting domestic demand. In 2025, domestic market sales are expected to slightly increase by 0.04% year-on-year to 25.362 million units, of which Passenger Vehicle sales are projected to be 22.647 million units, a year-on-year increase of +1.0%. Higher subsidies for New energy compared to RBOB Gasoline vehicles, continuous improvement in the product strength and cost performance of independent brands, as well as the clearing out of RBOB Gasoline channels are expected to jointly promote the acceleration of New energy replacement. It is projected that domestic New energy Passenger Vehicle sales will be 14.805 million units in 2025, with a penetration rate of 65.4%.

In terms of structure, it is expected that by 2025, the growth momentum in the new energy subdivision market will be ranked as follows: A-Class PHEV > B+ Class PHEV > B+ Class EV > A00 + A0 Class EV > A-Class EV.

In intelligent driving, high-level intelligent driving will enter an accelerated popularization period. The "Intelligent Driving Equity" will bring about accelerated iteration of supply-side products, continuously enriching market supply. Large models of intelligent driving will require higher R&D investment, which is expected to lead to continued improvement in industry concentration. The leading tier will begin to establish a generational gap in high-level intelligent driving capabilities, making market competitive advantages increasingly evident.

New industries: driven by technology and policy, a trillion yuan market blueprint unfolds, fostering new opportunities in the automotive industry chain.

Carrying the software and hardware technology of new energy vehicles, numerous emerging industries have been nurtured, including Robotaxi, integrated vehicle-road cloud, low-altitude economy, and humanoid robots. Since 2024, technological innovation and policy support have formed a dual drive for emerging industries, such as large-scale promotion of Luobo Kuai Pao in Wuhan; the first batch of pilot cities is accelerating the bidding and scheme design for vehicle-road cloud projects; local governments are intensively planning the development goals for low-altitude economy industries in the second half of the year; and Tesla's Optimus technology maturity continues to improve. Under the dual drive of technology and policy, emerging industries are expected to usher in rapid development, bringing new growth opportunities for the entire automotive industry chain, including complete vehicle manufacturing, intelligent driving components, and chassis components, which will add new market scale of trillions.

Investment Suggestions

Passenger Vehicles: Recommended passenger vehicles include BYD (01211), Chongqing Sokon Industry Group Stock (601127.SH), Li Auto (02015), Great Wall Motor (601633.SH), and Chongqing Changan Automobile (000625.SZ), with beneficiaries such as Geely Automobile (00175), Xpeng Motors (09868), and LEAPMOTOR (09863).

Commercial Vehicles: Recommended Weichai Power (000338.SZ), with beneficiary symbol SINOTRUK (000951.SZ); for intelligent components: recommended Huizhou Desay SV Automotive (002920.SZ), Bethel Automotive Safety Systems (603596.SH), Keboda Technology (603786.SH), Supcon Juchuang (02498), and Jingwei Hengrun (688326.SH).

Beneficiaries of the low-altitude economy: Zhejiang Wanfeng Auto Wheel (002085.SZ) and Chongqing Zonsen Power Machinery (001696.SZ); for humanoid robots: recommended Ningbo Tuopu Group (601689.SH), with beneficiaries like Shanghai Beite Technology (603009.SH) and Wuxi Best Precision Machinery (300580.SZ).

Risk Warning

The risks of domestic sales in the Automotive market not meeting expectations; the risks of intensified market competition; the risks of export growth not meeting expectations; the risks of XINXINGCHANYE development not meeting expectations.