Caitong Securities: Premiumization + Exports Drive Volume; Autonomous Driving + Robotics Spur Industry Upgrade

Stock News12-01

According to Caitong Securities, passenger vehicle demand is expected to remain relatively stable in 2026, with subsidy policies such as trade-in programs likely to continue. Structural growth in the sector will primarily stem from the premium segment and sustained rapid growth in exports. Meanwhile, several automakers are pivoting toward robotics, an industry transitioning from its introductory phase to a growth stage, presenting opportunities for companies with transformation capabilities and intent. The firm recommends focusing on premium vehicles, robotics, and autonomous driving.

Key insights include:

**Stable Passenger Vehicle Demand with Marginal Growth from Premiumization + Exports** Total passenger vehicle demand is projected to stay steady in 2026, supported by ongoing subsidies. Market share for domestic brands and new energy vehicle (NEV) penetration rates are stabilizing, leading to a dynamic equilibrium between domestic and joint-venture brands, as well as between ICE and NEVs. Structural growth will be driven by: 1. The premium segment (vehicles priced above RMB 150,000), where domestic substitution is ongoing. 2. Sustained export growth, fueled by overseas production facilities and localized vehicle development.

**Tech-Driven Upgrades: Autonomous Driving + Robotics** By 2026, autonomous driving is expected to enter a new phase of U.S.-China synergy. China may see broader adoption of L2 standards and L3 pilot programs, alongside a surge in unmanned delivery vehicles. In the U.S., Tesla’s influence could propel explosive growth in Robotaxis.

The automotive and robotics industries share strong technological and customer synergies. As auto sales growth slows, automakers are increasingly shifting toward robotics, which is transitioning into a growth phase. Companies with transformation capabilities stand to benefit.

**Commercial Vehicles: Exports and AI Data Center Demand** Domestic heavy truck demand remains pressured, but exports—particularly to Russia—are expected to rebound in 2026. Medium/large bus exports, especially to Europe, should maintain rapid growth, with profitability hinging on NEV adoption in the region. Meanwhile, AI data centers are driving incremental demand for diesel engines.

**Recommendations:** - **Passenger Vehicles:** Jianghuai Automobile, BYD, BAIC BluePark; monitor Xiaomi Group. - **Robotics:** Top Group, Yinlun Co., Landai Technology, Minth Group; watch Xinquan Automotive, Keboda, and Shuanghuan Driveline. - **Autonomous Driving:** Bethel Automotive, Horizon Robotics, Nexteer, Pony.ai. - **Commercial Vehicles:** Yutong Bus, Weichai Power; monitor Sinotruk Hong Kong.

**Risks:** Subsidy policies falling short, export uncertainties, and slower-than-expected progress in Tesla’s robotics initiatives.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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