Guosheng Securities: Domestic demand for cars is slowing down, shifting gears and going overseas, driving the passenger car boom

The Zhitong Finance App learned that Guosheng Securities released a research report saying that passenger car retail sales declined by about 21% year-on-year in the first 8 months of 2026, while passenger car and new energy vehicle exports were 6.25 million units and 3.44 million units respectively, up 72% and 120% year on year. Domestic demand decelerated and overseas travel increased. The bank believes that there are still quite a few high-quality new cars on the market in 2026H2, and the domestic sales margin is expected to improve with the arrival of model deliveries and peak sales season; car companies accelerate the promotion of overseas strategies, boost the international environment, and continue to strengthen the main line logic of going overseas. It is recommended to focus on targets related to the two main lines of exports and new cars.

Guosheng Securities's main views are as follows:

Market review: The sector is undergoing deep adjustments, domestic demand is under pressure, and car companies are making efforts to go overseas

From January to August 2026, the passenger car/parts/robot sector index fell by -26%/-16%/-6%. Looking at the stages: 2026H1, optimization of the “two new” policies + halving of new energy purchase tax, passenger car retail sales fell 20% year on year, domestic demand pressure was prominent, the US-Iran conflict boosted oil prices and freight, lithium, storage and other raw material prices, which had a significant impact on vehicle and supply chain profits, and deep sector adjustments; 2026Q3, pessimistic domestic demand expectations were fully released, leading companies had impressive overseas business. Export profits drove performance. The operating performance of BYD, Geely, etc. exceeded market expectations, and the vehicle index performed better than parts; at the individual stock level: BYD, Geely, etc., Geely relied on strong exports, and its stock price outperformed significantly Accompanying.

Domestic demand shifts and decelerates, and overseas growth exceeds expectations

In 2026, the “two new” policy was implemented. The subsidy was changed from a fixed amount to a sales price ratio, the new energy purchase tax was reduced by half from 0, and the domestic car purchase policy ushered in structural adjustments. Domestic demand was under significant pressure, and passenger car retail sales declined by about 21% year over year in the first 8 months. In contrast, automobile companies' overseas strategies continued to be implemented, compounded by rising fuel prices to boost overseas demand. In the first 8 months, passenger car/NEV exports were 625/3.44 million units respectively, a sharp increase of 72%/120% over the previous year, and the performance exceeded expectations. The structural differentiation of the export market is obvious. The Russian and Pakistani markets are growing rapidly, the European market has made steady breakthroughs, and the ability of automobile companies to deploy overseas is a core factor in the differentiation of performance and valuation in adulthood.

Intensive launch of new vehicles compounded high export growth, reshaping sales and profit patterns

Car companies' efforts to launch new cars have not abated. Geely, BYD, and Zero Sport have improved their model matrices, Xiaopeng has increased their growth, and Hongmeng's “Five Realms” continues to upgrade. 2026H1, Zero Run/NIO sold 36/ 190,000 units, +60.8%/+67.4% year over year. The export sales volume of Cherry/BYD/Geely/Zero Sport was 94/79/47/ 100,000 units respectively during the same period, +71.5%/+70.6%/+157.6%/+372.6%. On the cost side, lithium carbonate rose by up to 150%, and the 32Gb NandFlash price increased more than 8 times, significantly increasing vehicle procurement costs. Sales and export differentiation also further affected performance. Although “reverse internal volume” relieved terminal price reduction pressure, against the backdrop of domestic demand pressure and sales of mid-to-high-end models falling short of expectations, the profitability of car companies with high export share and strong cost control was even more prominent.

Risk Alerts: Policy implementation falls short of expectations, overseas demand & policies fall short of expectations, estimates generate risks, differences in data caliber