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Equities
● Automobiles
9 June 2021
Exhibit 3. Car demand momentum is
picking up from 3Q20
Exhibit 4. April retail volume is up 12.3% y-
o-y while down 8.7% m-o-m
Source: CADA, HSBC Qianhai Securities
Source: CADA, HSBC Qianhai Securities
Increasing pricing pressure among local brands in low season 2Q
According to CADA data, the wholesale volume growth is slightly higher than retail volume
growth in the first four months of 2021, suggesting potential channel stocking and inventory
build-up. The current industry inventory is 1.57 months while the Inventory Alert Index, which
signals whether auto demand is strong, is at 56.4%, higher than the threshold of 50%.
2Q is usually a low season for local brands sales. Additionally, local brands’ inventory levels are
higher than those of international brands in general, which may result in higher pricing pressure
and more intense price competition.
Exhibit 5. Vehicle Inventory Alert Index is
at 56.4%, above the inventory management
threshold
Exhibit 6. Inventory levels is keeping up
from March 2021
Source: CADA, HSBC Qianhai Securities
Source: CADA, HSBC Qianhai Securities
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
Jan-Feb 17
May-17
Aug-17
Nov-17
Mar-18
Jun-18
Sep-18
Dec-18
Apr-19
Jul-19
Oct-19
Jan-Feb 20
May-20
Aug-20
Nov-20
Mar-21
Monthly y-o-y growth
26%
68%
12%
0%
20%
40%
60%
80%
100%
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Jan Mar May Jul Sep Nov
2019 monthly sales volume
2020 monthly sales volume
2021 monthly sales volume
2021 Y-o-y growth
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Jan 18
Apr 18
Jul 18
Oct 18
Jan 19
Apr 19
Jul 19
Oct 19
Jan 20
Apr 20
Jul 20
Oct 20
Jan 21
Apr 21
Inventory Alert Index Threshold
1.53
1.68
1.54
1.57
0.00
0.50
1.00
1.50
2.00
2.50
3.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Inventory Indicator 2019
Inventory Indicator 2020
Inventory Indicator 2021
Threshold