GF Securities released a research report stating that, according to data from the National Bureau of Statistics, the Average Selling Price (ASP) of passenger vehicles in 2021, 2022, 2023, 2024, and 2025 increased year-on-year by +0.1%, +3.1%, -0.1%, -8.3%, and -2.1% respectively. The passenger vehicle industry in 2025 continued to follow the logic of "stable volume, moderate pricing." Looking ahead to 2026, fixed-ratio subsidies are expected to boost the sales proportion of mid-to-high-end vehicles, leading to "price increases." Furthermore, significant consumer hesitation in Q4 2025 has substantially reduced demand pull-forward, while the extension of the vehicle replacement policy ensures that replacement demand remains resilient. Regarding inventory, the dynamic inventory-to-sales ratio for the passenger vehicle industry stood at 2.48 by the end of December 2025. Although this ratio saw a short-term increase in December, considering the subsequent release of demand following the policy extension, short-term inventory risks are deemed manageable. The main views of GF Securities are as follows:
Passenger vehicle compulsory insurance sales in Q4 2025 did not show a typical year-end surge, with full-year 2025 sales up 0.6% year-on-year, laying a foundation for "stable volume" in 2026. According to compulsory insurance data, domestic passenger vehicle sales (excluding imports) in December 2025 were 2.278 million units, representing a year-on-year decrease of 16.4% but a month-on-month increase of 13.6%. Cumulative passenger vehicle sales for 2025 reached 23.052 million units, up 0.6% year-on-year. Historically, the average month-on-month growth rate in December for normal years and years with policy phase-outs was +4.6% and +34.7%, respectively. The December demand performance was significantly weaker than seasonal patterns, likely due to increased consumer caution stemming from the suspension of the vehicle replacement subsidy policy in some regions.
The outlook for domestic passenger vehicle demand in 2026 is maintained as "price rise, volume stability." Data from the National Bureau of Statistics shows passenger vehicle ASP year-on-year changes of +0.1%, +3.1%, -0.1%, -8.3%, and -2.1% for 2021 through 2025, indicating the industry's continued trend of "stable volume, moderate pricing" in 2025. Specifically, in December, automotive retail sales of social consumer goods fell 5.0% year-on-year, while the industry's ASP rose 13.7% year-on-year, with the growth rate accelerating since turning positive in October. For 2026, fixed-ratio subsidies are projected to increase the sales share of mid-to-high-end vehicles, driving "price increases." Additionally, heavy consumer观望 in Q4 2025 led to a significant reduction in demand pull-forward, and the extended replacement policy continues to support flexible replacement demand. (1) Scrappage Subsidies: If vehicles eligible for scrappage are extended by one year, the "growth in the stock of vehicles eligible for scrappage" is estimated to contribute a 2.1% elasticity to terminal passenger vehicle sales in 2026. (2) Replacement Subsidies: If extended by one year, the combined effect of an "increased passenger vehicle parc" and "rising average vehicle age" boosting the replacement rate is estimated to contribute a 4.3% elasticity to 2026 terminal sales. Synthesizing these factors, domestic compulsory insurance sales in 2026 are forecast to achieve positive year-on-year growth.
Short-term inventory risks in the passenger vehicle industry appear limited. Based on data from the China Association of Automobile Manufacturers and compulsory insurance, passenger vehicle industry inventory stood at 4.708 million units by the end of December 2025, with a decrease of 37,000 units during the month. The dynamic inventory-to-sales ratio (absolute inventory / average terminal sales over the past 12 months) was 2.48 at the end of December. The short-term uptick in this ratio during December was primarily attributed to strong consumer hesitation (as the replacement policy was suspended in most regions) coupled with relatively slow production adjustments by automakers. Going forward, leading independent automakers may proactively adjust production based on current demand. Considering the potential release of demand after the policy extension, short-term inventory risks are not considered significant.
Risk warnings include a potential decline in industry景气度, policy stimulus effects falling short of expectations, and intensifying industry competition.
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