1、 Disclosures&Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix,and with the Disclaimer,which forms part of it.Issuer of report:The Hongkong and Shanghai Banking Corporation Limited View HSBC Global Investment Research at:https:/ Find o

2、ut moreHSBC12th Annual China ConferenceShenzhen|1-2 September 2025 Low summer seasonality saw competitive new car pricing;demand dynamics more robust on new car/budget segment Consolidation is taking a pause coupled with anti-involution Prefer suppliers to OEMs;among OEMs we like names with strong 2

3、H product cycles,eg Geely(0175 HK,Buy,TP HKD30)Seasonal slowdown in July and August;new car and budget EV segment relatively more robust.China passenger car sales booked 1.8m units in July(+7%y-o-y and-12%m-o-m;EV penetration at 53.7%).This reflects front-loaded demand in June ahead of half-year tar

4、gets,a compounded summer low season amid broader consumption softness.Notably,recent new model launches have surprised with aggressive pricing,while demand for budget EVs(priced below RMB100k)continues to outpace the broader market.Consolidation is taking a pause while anti-involution might continue

5、 to drive capacity,supply chain and pricing discipline.While electrification and consolidation had been pushing higher industry concentration in the past couple of years,we see consolidation is taking a pause in the first seven months of the year with the top 10 players market share at 77%(vs.78%in

6、2024).This is driven by:1.Fast scaling newcomers from the tech space such as Xiaomi;2.Lower than expected potential industry mergers(such as Changan and Dongfeng);and 3.Continuous anti-involution initiatives that have been driving capacity,supply chain and pricing discipline.Industry and investment