The Zhitong Finance App learned that Open Source Securities released a research report stating that in the context of the global automobile industry accelerating the transformation of electric intelligence, China's automobile products have begun to penetrate developed markets such as Europe and the US, and passenger car and commercial vehicle exports have shown a sharp rise in volume and price. According to car companies, brands such as Chery and SAIC Motor are leading in passenger car exports, while Yutong Bus's bus export business has performed well, and overseas business is expected to contribute to increased performance. Currently, in the context of leading electric intelligent technology and cost advantages brought by supply chain improvements, automakers and Tesla supply chain companies are optimistic about increasing their share of overseas business and actively building overseas production capacity.

Recommended targets:

Changan Automobile (000625.SZ), BYD (002594.SZ), Great Wall Motor (601633.SH), Tuopu Group (601689.SH), Xusheng Group (603305.SH), Silver Wheel Co., Ltd. (002126.SZ); other beneficiaries: Yutong Bus (). 600066.SH

The main views of Open Source Securities are as follows:

China has become the world's largest automobile exporter, and its leading edge in electric intelligence has driven a sharp rise in the volume and price of automobile exports

In 2023, China's automobile exports reached 4.91 million vehicles, making it the world's largest automobile exporter. The development of overseas business is conducive to easing the contradictions of increasing competition in China's automobile industry and promoting the upgrading of automobile industry brands. However, behind the booming automobile overseas business, there are not only external factors affecting the international automobile supply chain due to the impact of the epidemic and the obvious contraction of automobile supply in Russia and other CIS countries due to the geopolitical crisis, but also the influence of internal factors such as China's relatively complete automobile supply chain, and advantages in terms of scale effects and labor costs. In particular, technical advantages in the field of electric intelligence have given China's automobile industry the opportunity to overtake cars.

At the same time, in the context of the global automobile industry accelerating the transformation of electric intelligence, China's automobile products have begun to penetrate developed markets such as Europe and the US, and exports of passenger cars and commercial vehicles have shown a sharp rise in volume and price. According to car companies, brands such as Chery and SAIC Motor are leading in passenger car exports, while Yutong Bus's bus export business has performed well, and overseas business is expected to contribute to increased performance.

Vehicle overseas: from direct export of products to overseas localized supply, deepening ties with the global automotive industry

Looking back at the journey of Chinese car companies going overseas, most of them have gone through the process of directly exporting products to establishing localized production, sales, R&D, and supply chain systems. Direct product exports can quickly enter target markets in the early stages of development, and establishing a localized supply chain system can better understand target markets, bypass barriers such as tariffs, and reduce transportation costs.

Therefore, on the basis of a stable domestic market, car companies that actively lay out overseas sales, production, R&D, and supply chain systems are worth paying attention to. In particular, the volume of overseas production capacity is expected to drive the rapid growth of overseas sales of automobile companies.

In terms of specific practice, (1) some car companies have accelerated their entry into target markets through mergers and acquisitions, such as SAIC Motor's acquisition of the European brand MG; (2) BYD adopted the “B first, then C” strategy to take the lead in electric buses going overseas in regions with a high degree of electrification and policy support, and use this as a basis to promote the rapid development of passenger car overseas business; (3) Changan is deeply cultivated in countries along the “Belt and Road”, and the goal of the “Haina Baichuan” plan is to make Changan a world-class car company; (4) Great Wall insists on “going overseas” It has more than 700 sales channels overseas, and its products have entered more than 170 Countries and regions; (5) Yutong Bus exports new energy buses to 80% of the “Belt and Road” countries and many European countries, and became the 2023 domestic bus export champion and 2022 European pure electric bus sales champion; (6) “reverse joint ventures” have become a new model for car companies to go overseas, such as Volkswagen's investment in Xiaopeng and Stellantis's investment in Zero Run, showing that well-known overseas car companies fully recognize the new power of electric intelligence technology.

Parts go overseas: Following Tesla's production capacity distribution and active construction of factories, Mexico has become the focus of many companies' layouts

In terms of parts companies, it is similar to a complete vehicle going overseas. In addition to direct product exports, some parts companies are building overseas production bases in Mexico and other places to better serve Tesla's global production capacity layout, such as Tuopu Group, Xusheng Group, and Silver Wheel Co., Ltd. As local car manufacturers accelerate their overseas deployment, more parts companies will build overseas production bases in the future, and the rapid expansion of overseas production capacity is expected to continue to contribute to increased performance.

Risk warning: Overseas passenger car sales fall short of expectations, NEV penetration rate falls short of expectations, overseas policy uncertainty, overseas production capacity construction falls short of expectations, and international shipping is at risk.