CITIC Construction Investment | Passenger vehicle market sentiment continues to improve, with facelift models showing "price increases and more features"

Cover story｜Cheng Siqi Tao Yiran Chen Huaishan Ma Boshu Hu Tiankuang Li Yuewan Cai Xinghe Zhao Hanzhi Bai Ge

At the current point in time, in the first half of March, wholesale passenger cars reached 648k units (YoY: -20%, MoM: +36%). The bottoming of February sales has essentially been confirmed, and the trend of improving market sentiment on a month-over-month basis in March is clear. Commercial vehicle exports are maintaining high growth; heavy-duty trucks in Q1 are expected to achieve an “opening red” (strong start). The physical AI segment is seeing a surge of catalysts: Nvidia’s GTC released the Alpamayo 1.5 autonomous driving model, Tesla’s Optimus V3 is set to be finalized for mass production, Cybercab will start large-scale mass production in April, and the push for FSD to enter China is moving toward implementation. Combined with progress such as XPeng’s second-generation VLA and Waymo/WeRide’s Robotaxi going overseas, the current recommendation is to actively position for the technology mainline.

Passenger cars: From March 1 to March 22, wholesale volume was 648k units, up 62% versus the same period last month on a month-over-month basis. Clear signals show that the market sentiment bottom has rebounded. Aito M6 and Shangjie Z7/Z7T have started pre-sales; both come standard with 896-line LiDAR. The rollout of advanced intelligent driving is accelerating. Xiaoma’s 2026 target is 3,000 Robotaxis: the domestic plan is to enter 20 cities, while the overseas rollout includes Croatia/UAE/Luxembourg/South Korea, etc. WeRide’s Robotaxi revenue in 2025 is RMB 150 million (+209.6%); it has already been deployed in 12 countries and 40+ cities. The industry’s trend toward commercialization and scaling continues to advance. This year, multiple facelift/replacement models have shown a “price increase with feature upgrades” trend—for example, BYD’s new battery plus fast flash charging; Aito M9 and Zunjie S800 adding upgraded LiDAR; Xiaomi upgrading its batteries/motors/computing power. Entry trims are being supplemented with LiDAR, while higher trims add features such as light-sensing panoramic skylights. Driven by “anti-price wars” and “subsidies proportional to output” policies, average passenger car prices are expected to stabilize and rebound.

Commercial vehicles: Focus on the AI power/compute shortage main line and individual stocks with an “opening red” performance.

Robotics: Optimus released its latest video. In lab environments, large numbers of robots can already complete complex household tasks such as washing/folding clothes, washing dishes, and sweeping the floor. In the industrial sector, they are already proficient at tightening screws and battery sorting. The demonstration shows detailed product information at scale; design continues to be optimized, improving expectations for Optimus 3 mass production.

1、Industry conditions are worse than expected. In 2026, the domestic economy will recover, but the specific timing remains to be observed. Demand in the auto industry may fluctuate accordingly. Slower growth in consumer income or expectations fluctuation will also affect the effectiveness of promotions such as trade-in for upgrades. Insufficient demand in the passenger and freight markets will also constrain the proportion of commercial vehicles being scrapped and replaced, ultimately impacting the pace of demand recovery in the auto industry.

2、The effects of policy implementation are worse than expected. It will still take time for the trade-in for upgrades of consumer goods and the equipment renewal policies to be fully implemented. Policy publicity and information dissemination also require some time. Whether subsidy funds can continue to be disbursed effectively and whether replacement demand can be released smoothly are both subject to ongoing observation.

3、Export sales are worse than expected. Export performance is affected by multiple factors such as international conditions, national policies, and exchange rates, creating a risk of volatility in overseas sales growth.

4、The industry competitive landscape is deteriorating. Under the trend of electrification and intelligentization in the auto industry, domestic automakers and component suppliers are racing to deploy. As supply-side factors change—driven by technological progress, the ramp-up of new production capacity, and so on—competition in the future may intensify. Market share and profitability of automakers and component companies may experience some volatility.

5、Customer expansion and the mass production progress of new projects are worse than expected. Under the trend of electrification and intelligentization, the existing structure of automaker and component supply chains is being reshaped. Component companies that secure new customers and incremental demand from new projects are expected to benefit, while some component companies’ market share may be impacted.

Cheng Siqi: Chief auto industry analyst. Master’s degree in vehicle engineering from Shanghai Jiao Tong University. Studied under the head of the Engine Institute. Previously worked at Dongwu Securities and Guosen Securities. Four years of research experience in the securities industry. In 2017, core member of the second team of New Fortune. In 2020, ranked #1 among New Fortune’s “Rising Star” analysts for Sina Finance. In 2020, ranked fifth in the team of “Best Auto Industry Analysts” in the Golden Ox awards. Deeply covers new energy automakers, intelligentized components, and grasps the wave of intelligentization and electrification. Conducts research at the forefront of the full value chain of intelligent driving, tracking closely the evolution of the commercialization frontiers from the uppermost supply chain—onboard chips—to the most cutting-edge L4 business model. Ranked fourth in New Fortune’s “Best Analysts” for the auto industry in 2021.

Tao Yiran: Co-Head Chief Auto Industry Analyst. Previously served as an auto analyst at Galaxy Securities. Joined the China International Capital Corporation (CICC) auto team in 2018. In 2018/19, was a core member of the Wind “Gold” analyst team. In 2019/20, was a core member of the Sina Finance “Rising Star” analyst team; in 2020, was a core member of the Golden Ox “Best Industry Analysis” team; in 2021/22, was a core member of the New Fortune and Crystal Ball “Best Analyst” teams.

Chen Huaishan: Auto industry analyst. Master’s degree in mechanical engineering from Shanghai Jiao Tong University. Previously worked at the Research Institute of Changjiang Securities, with five years of securities industry research experience. From 2017 to 2019, was a member of the first team for New Fortune in the power equipment and new energy industry. Joined CICC Securities in 2021. In 2022, was a member of the fourth team for New Fortune in the auto and components industry. Conducts research on new energy vehicles, components, and automakers.

Ma Boshu: CFA (Chartered Financial Analyst). Master’s degree in statistics from Columbia University in the United States. Bachelor’s degrees in mathematics and actuarial science from the University of Iowa. Member of the Society of near-actuarial professionals in North America. Joined CICC Securities in 2018. In 2018/19, was a core member of the Wind “Gold” analyst team. In 2020, was a core member of the Golden Ox “Best Industry Analysis” team.

Hu Tiankuang: Master’s degree in economics from Renmin University of China. Bachelor’s degree in economic statistics from Huazhong University of Science and Technology. Joined CICC Securities in 2021. Member of the New Fortune and Crystal Ball teams in 2021; member of the New Fortune, Crystal Ball, and Golden Ox award teams in 2022.

Li Yuewan: Master’s degree in economics from Renmin University of China, responsible for research in the commercial vehicle and traditional components fields.

Cai Xinghe: Master’s degree in economics from The Chinese University of Hong Kong. Previously worked at the research department of ZhongTai Securities. Joined CICC Securities’ Research and Development Department auto team in 2025.

Zhao Hanzhi: Auto industry analyst at CICC.

Bai Ge: Master’s degree from New York University, bachelor’s degree from Shanghai Jiao Tong University. Primarily covers auto components. Joined CICC Securities in 2023.

Securities research report title: “Market sentiment continues to rebound; facelift and replacement cycles show a ‘price increase with feature upgrades’ pattern”

External release date: April 1, 2026

Report issuing organization: CICC Securities Co., Ltd.

Report authors/analysts:

Cheng Siqi SAC No.:S1440520070001

SFC No.:BQR089

Tao Yiran SAC No.:S1440518060002

Chen Huaishan SAC No.:S1440521110006

Ma Boshu SAC No.:S1440521050001

Hu Tiankuang SAC No.:S1440523070010

Li Yuewan SAC No.:S1440524070017

Cai Xinghe SAC No.:S1440526010001

Zhao Hanzhi SAC No.:S1440525070015

Bai Ge SAC No.:S1440525080001

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