Shenwan Hongyuan Group Co., Ltd. has released a research report stating that automotive demand is minimally affected by policy changes, with an optimistic view on the stronger-than-expected recovery of mid-to-high-end demand. Significant changes have occurred in consumer habits, purchasing power, demographic structure, and product competitiveness compared to eight years ago, suggesting that excessive concern about next year's subsidy reductions is unwarranted. The firm believes that excellent new B/C-segment products will significantly stimulate consumer replacement demand. Policies will have a structural impact on the A0/A00 market, but a further increase in the new energy vehicle penetration rate is inevitable.
The excess profit from vehicle exports stems from the "engineer dividend." Shenwan Hongyuan believes the globalization path for this wave of Chinese smart electric vehicles has already begun, with overseas sales expected to approach 10 million units in five years. Key viewpoints from Shenwan Hongyuan are as follows:
Auto parts are a typical representative of China's "high-end manufacturing," possessing advantages in scale, cost, and technology. Consequently, driven by technology, new applications such as robotics, the low-altitude economy, and AI data centers have become essential targets for these companies. Secondly, leading enterprises are achieving secondary growth through globalization.
1. "Robotics," the "low-altitude economy," and "AI data centers" have become definitive new industrial directions. The robotics industry chain, led by companies like Tesla, Zhiyuan, and Yushu, is a key industry focus. The timing for tangible industry results is approaching, with 2026 expected to be a pivotal year for transitioning technological growth from expectation to realization. Automotive parts companies demonstrate strong capabilities for horizontal expansion. Technologies underlying liquid cooling and the low-altitude industry are highly compatible with those in the automotive sector. The core support is advanced high-end manufacturing capability, which promises shared customer resources, synergistic cost optimization, and reuse of core technologies.
2. Overseas expansion has become a definitive trend, with globalization remaining a long-term growth path for excellent auto parts companies. The focus for 2026 will be on expansion into Europe. The exit of overseas competitors has created a supply gap. The approaching deadlines of European carbon emission regulations and the implementation of new energy policies are accelerating the transformation of automakers. As many companies face relative bottlenecks in increasing domestic market share, they are accelerating their overseas expansion, with an acceleration in securing European orders.
The automotive industry is undergoing a dual transformation centered on electrification and AI-driven intelligence. The automobile is both the final piece of the electrification revolution puzzle and the first piece for AI implementation in the physical world. AI Cars will evolve into super-intelligent entities integrating four major systems: driving, cockpit, chassis, and powertrain. Simultaneously, AI will enhance the smart cockpit experience and enable end-to-end integration of "smart driving + chassis." The "Token" is expected to become a significant metric for measuring and forecasting company valuations.
Looking ahead, the industry will witness technological spillover from smart vehicles into robotics, the low-altitude economy, and deep-sea technology.
Risk warnings include the potential for subsidy reductions and new energy vehicle purchase tax impacts to exceed expectations, and overseas growth rates falling short of forecasts.