Automotive industry: Microbuses and light trucks have recovered

In the January-February of 2009, the overall demand of the auto market is still running low, but there are many bright spots in the sub-sector.

In January-February 2009, the overall demand for the automotive market was still low, but there were many bright spots in the sub-sector. As shown in Figure 1, according to data from the Automobile Industry Association, a total of 1.563 million automobiles were sold in January-February 2009, a slight increase of 2.7% compared to the same period of 2008, indicating that demand has not recovered significantly. Among them, passenger car sales were 1.281 million, an increase of 5.8% year-on-year. Commercial vehicle sales reached 345,000 units, down 7.2% year-on-year.

We maintain our "neutral" investment rating for the automotive industry. From the point of view of industry recovery, we propose to focus on the heavy truck industry and micro customer industry. The specific listed companies are Sinotruk, CNHTC Group, Weichai Power, Changan Automobile and Dongan Power. In passenger cars, it may focus on small-displacement sales, or better-run companies with independent brands, focusing on BYD, FAW Car and Haima.