Automotive industry: impressive growth in sales of passenger cars

Overall sales in May were better than market expectations. In May 2012, the sales of automobiles were 1,607,200 units, a decrease of 1.06% from the previous period and a year-on-year increase of 15.97%. Among them, the sales of passenger cars were 1,281,900, an increase of 0.46% from the previous quarter and a year-on-year increase of 22.56%. Commercial vehicles sold 323,300 units, a decrease of 6.63% from the previous period and a decrease of 4.30% year-on-year. The year-on-year increase in May was 10.78 percentage points higher than that in April. In line with our expectations, it is better than market expectations, indicating that China’s auto consumption demand is still very strong.

The market performance of passenger cars is still significantly better than that of commercial vehicles. From January to May, automobile sales were 8,023,500, an increase of 1.70% year-on-year. Among them, 6.33 million passenger cars were sold, an increase of 5.48% year-on-year; sales of commercial vehicles were 1,693,500, a year-on-year decrease of 10.31%. The market performance of commercial vehicles still lags significantly behind that of passenger cars. The performance of commercial vehicles is still uncertain.

The SUV market in passenger cars remains strong. From January to May, there were 4,343,900 cars sold, an increase of 4.53% year-on-year; MPV sales were 260,900 units, an increase of 4.43% year-on-year; SUV sales were 760,400 units, an increase of 28.08% year-on-year; micro-car sales were 1,101,800, a year-on-year decrease of 3.28%. Among them, the growth rate of SUV is the most prominent.

Passenger cars in commercial vehicles perform significantly better than trucks. From January to May, 196,600 passenger cars were sold, an increase of 3.58% year-on-year, and 1,119,800 were trucks, down 6.06% year-on-year. It is still recommended to focus on the listed companies of passenger cars.

Due to the base number, car sales in the next few quarters will generally show a good quarter-by-quarter trend. We are cautiously optimistic about the market conditions of automobile stocks in the second half of the year. Give the automotive industry "synchronous momentum" investment rating. Systemic opportunities are hard to come by. Due to the completion of the government change and the two years of adjustment in the automotive industry in 2011-2012, it is expected that the auto industry will have a better performance in 2013.

Investment risks: The macroeconomic environment continues to deteriorate and the competition in the auto industry further intensifies.