The 2025 Shanghai International Auto Show was grandly held at the National Exhibition and Convention Center, attracting nearly a thousand automotive enterprises from 26 countries and regions to participate. Compared with 2023, the number of new vehicles on display decreased from 141 to 97, with 67 of them being new energy vehicles, indicating that the automotive market has reached an inflection point of rationality and calmness. The absence of numerous overseas brands, such as Lamborghini, Maserati, Rolls-Royce, Hyundai, Jaguar Land Rover, and Subaru, signals that competition in the Chinese market has entered a critical stage—those who do not advance will fall behind.

On Thursday, April 24, local time, the German government revised down its economic growth forecast for this year, predicting that its GDP would stagnate after two consecutive years of contraction. Outgoing German Minister of Economy Habeck stated in a press release in Berlin on Thursday that Germany's economic growth rate this year could be zero, lower than the 0.3% growth forecast in January. In October last year, the German government had predicted a 1.1% growth rate for this year. As the largest economy in Europe, Germany has experienced two consecutive years of economic contraction, making it the only G7 member that failed to achieve economic growth in the past two years. Habeck attributed Germany's persistent economic weakness to the uncertainty caused by the trade war initiated by US President Trump, weak export demand, and declining competitiveness. For a long time, Germany has relied on exports to drive economic growth, leading the world in high-end manufacturing sectors such as industrial machinery and luxury cars. Trump's tariff policies have further increased the risks faced by German exports, as he previously imposed a 20% reciprocal tariff on the EU. Germany is the US's largest trading partner in Europe, with a record trade surplus of 70 billion euros with the US in 2024. "Given Germany's deep integration into global supply chains and high degree of openness to foreign trade, the new wave of US trade protectionism could have significant direct and indirect impacts on our economic growth," he said. Habeck called for negotiations to resolve the transatlantic trade dispute. Habeck also noted that since early November last year, Germany has not had a governing majority in parliament, and a new government has yet to be formally formed after the February elections. In the February elections, the conservative Union Party (composed of the CDU and CSU) won the most seats. The German parliament is scheduled to meet on May 6, and if the parties of the new government approve the coalition agreement reached earlier this month, the parliament will vote to elect CDU leader Merz as the new chancellor. Previously, the Union Party had reached a coalition agreement with the center-left Social Democratic Party. Last month, the Union Party, together with the SPD and the Greens, pushed through an investment plan aimed at significantly increasing defense and infrastructure spending in an attempt to boost the economy. However, Habeck stated that the economic boost from these fiscal stimulus measures would not be felt until next year, when growth is expected to reach 1%. German Central Bank President Nagel was more pessimistic, saying in a media interview on Wednesday that if Trump's tariff policies are fully implemented, the German economy could contract for the third consecutive year this year.

【Contact with Mercedes-Benz Executives, or Securing Audi's Designation: ZhuoYu Technology Expands Its Intelligent Driving "Onboard"】① According to informed sources who spoke to Caixin, Audi is expected to collaborate with ZhuoYu Technology on two new vehicle models. ② Mercedes-Benz executives also recently visited ZhuoYu Technology—after partnering with Momenta in the intelligent driving sector, they continue to seek a "Plan B" for intelligent driving solutions.

German luxury car manufacturer Mercedes-Benz announced on April 7 that its global sales of passenger cars and light commercial vehicles in Q1 this year dropped 7% YoY to 529,200 units from 568,400 units in the same period last year, affected by declining demand in the Chinese and European markets. Regionally, Mercedes-Benz passenger car brand sales in Europe reached 148,700 units in Q1, down 7% YoY, with sales in Germany at 45,300 units, down 10% YoY. In Asia, sales were 199,800 units, down 5% YoY, with sales in China at 152,800 units, down 10% YoY. In North America, sales were 76,900 units, up 4% YoY, with US sales at 67,400 units, up 1% YoY. In other regions, sales were 20,900 units, up 16% YoY. By powertrain type, Mercedes-Benz Group's pure EV sales in Q1 fell 10% YoY to 45,500 units, which the group attributed mainly to the discontinuation of the electric smart model in Europe and market volatility in some key regions. Plug-in hybrid (PHEV) models performed strongly in Q1, with global sales up 8% YoY, driven by robust demand in the US market. In terms of market segments, Mercedes-Benz's high-end car sales in Q1 were 65,100 units, down 2% YoY, accounting for 14.6% of the brand's total sales. Among them, Mercedes-AMG model sales rose 17% YoY, with growth across all regional markets. Mercedes G-Class SUV sales climbed 18% YoY. In the Chinese market, Mercedes-Benz successfully maintained its leading position in the million-yuan luxury car segment in Q1. Mercedes-Benz's core model series saw global sales decline 2% YoY to 263,400 units in Q1, with the popular GLC SUV and E-Class sedan models particularly standing out, with sales up 14% and 32% respectively. In the entry-level market, the company's global car sales in Q1 fell 9% YoY to 117,800 units.

Recently, the latest data released by the China Passenger Car Association (CPCA) shows that in March this year, the national passenger car market retail sales totaled 1.94 million units, up 14.4% YoY and 40.2% MoM. Since the beginning of this year, cumulative retail sales reached 5.127 million units, up 6% YoY. Cui Dongshu, Secretary General of the CPCA, pointed out that in recent years, the domestic car market retail sales have shown a trend of low in the first half and high in the second half. In March this year, retail sales were only slightly lower than the highest level of 1.98 million units in March 2018, remaining at a historical high for March. Driven by the national dual-new policy, the price war was relatively mild, and the cut-throat competition in the industry improved. The YoY retail growth rate in March this year was the highest in nearly 10 years, reversing the trend of low growth in March over the past decade. Domestic brands captured 63% of the market share. In March, domestic brands continued to perform well. CPCA data shows that in that month, domestic brand retail sales reached 1.22 million units, up 31% YoY and 33% MoM. Such strong growth momentum highlights the vitality and potential of domestic brands. With this achievement, domestic brands accounted for 62.7% of the domestic retail market, slightly down from February but still up 7.7 percentage points YoY. From January to March, the retail market share of domestic brands also reached 63%, up 7.9 percentage points YoY, further consolidating their dominant position in the market. Mainstream joint venture brands did not continue the trend of both YoY and MoM declines. In that month, their retail sales were 480,000 units, up 45% MoM, but still with a slight YoY decline. The market shares of major factions continued to decline, with German brands accounting for 17%, down 3.6 percentage points YoY; Japanese brands accounting for 12.2%, down 1.5 percentage points YoY; and US brands accounting for 6.8%, down 1.4 percentage points YoY. Focusing on the luxury car segment, retail sales in that month were 250,000 units, down 7% YoY but up 68% MoM. The retail market share was 12.9%, down 3 percentage points YoY. From the comparison of market shares, it is clear that domestic brands remain the absolute main force in the passenger car market, once again demonstrating the success of traditional domestic enterprises in their NEV transformation. The CPCA pointed out that domestic brands have gained significant increments in the NEV and export markets, with leading traditional automakers performing excellently in their transformation and upgrading. Brands such as BYD, Geely, Chery, and Changan have seen significant increases in their market shares. Data shows that in March, the NEV penetration rate among domestic brands in domestic retail sales was as high as 72%, while it was 35% for luxury cars and only 6% for mainstream joint venture brands. From the monthly NEV domestic retail market share, in March, mainstream domestic brands accounted for 71.5%, up 1.3 percentage points YoY; joint venture brands accounted for 2.8%, down 2.3 percentage points YoY; new forces accounted for 17.1%, up 3 percentage points YoY; and Tesla accounted for 7.5%, down 1.2 percentage points YoY. It can be said that the first-mover advantage of domestic brands in the NEV field is gradually transforming into comprehensive market competitiveness. Traditional domestic brands such as BYD, Geely, and Chery have successfully seized market opportunities by rapidly deploying NEV models. At the same time, new force brands are also accelerating their rise, further driving the growth of domestic brands' market share in the NEV field. In contrast, joint venture brands are lagging significantly in the NEV field, with their market shares continuing to decline, reflecting their strategic delays and insufficient technological reserves in the NEV transformation. Although the luxury car market has occupied a certain market share in the past due to brand premium and technological advantages, its NEV penetration rate is low, facing dual impacts from domestic high-end brands and NEV new forces, with increasing market competition pressure. Following this trend, 2025 may become an important year for domestic brands to accelerate the restructuring of the competitive landscape. According to the latest forecast by Gasgoo Automotive Research Institute, the market share of domestic brands is expected to reach 72.5% in 2025, with BYD, Chery, and Geely expected to contribute 1.88 million units of sales increment to the car market in 2025. NEV penetration rate rebounded to 51%. According to CPCA data, in March, the retail sales of passenger NEVs reached 991,000 units, up 38% YoY and 45% MoM. From January to March, cumulative retail sales reached 2.42 million units, up 36.4% YoY. Focusing on the single month, the NEV penetration rate in the overall domestic passenger car retail market in March was 51.1%, up 8.7 percentage points YoY. As is well known in the industry, in July 2024, the domestic retail penetration rate of NEVs exceeded 50% for the first time, and then remained above 50% for five consecutive months. However, in the following three months, due to factors such as the Chinese New Year (the period before and after the Chinese New Year is the peak season for car purchases in county and rural markets, with high demand for new purchases and a higher proportion of internal combustion engine vehicles), the corresponding penetration rate was below 50%. Now, after three months, the domestic retail penetration rate of NEVs has returned to above 50%, undoubtedly demonstrating the resilience of the NEV market. Cui Dongshu stated that the domestic retail penetration rate of NEVs rebounded to 51.1%, showing strong growth against the backdrop of scrappage and renewal, trade-in policies, and NEV purchase tax exemptions. It is reported that as of March 24, the total number of car trade-in applications nationwide exceeded 1.5 million. This data not only reflects consumers' strong demand for NEVs but also reflects the government's policy direction of promoting car consumption upgrading and energy conservation and emission reduction. As more consumers choose trade-ins, the NEV market is expected to see greater development space. Gasgoo also noted that in March, the export volume of passenger NEVs increased both YoY and MoM. This growth trend indicates that the competitiveness of China's NEV industry in the international market is continuously improving. Specifically, in that month, China's passenger NEV exports reached 143,000 units, up 6.4% YoY and 21.2% MoM, accounting for 36.6% of passenger car exports, up 4.9 percentage points YoY. Among them, pure electric vehicles accounted for 62% of NEV exports (83% in the same period last year). Although the proportion has declined, it remains the main force of NEV exports. As the core focus, A00+A0 class pure electric vehicles accounted for 33% of NEV exports (37% in the same period last year). Although the proportion has slightly declined, it still maintains a high level of exports. Focusing on automakers, BYD still performed excellently in passenger NEV exports, with its export volume reaching 67,307 units in that month, showing strong market competitiveness. Following BYD, Chery's passenger NEV export volume was 16,376 units, also performing well. Chery has gradually enhanced its international market visibility and influence by continuously launching NEV models that meet international market demand. In addition, Geely and SAIC Motor also performed prominently in passenger NEV exports. It is worth noting that Tesla China was mostly ranked in the top two previously, but its ranking has declined in the past two months. In March, its passenger NEV export volume was only 4,701 units, a significant gap from previous performance, which may be related to changes in overseas policies, weak demand, and intensified market competition. The car market in April is expected to grow steadily. Looking back at the performance of the passenger car market at the beginning of this year, January experienced a temporary cooling due to multiple factors. However, with the full recovery of social and economic activities after the Chinese New Year holiday, production and sales data rebounded strongly in February, and the market further returned to normal consumption rhythm in March. As Cui Dongshu said, the comprehensive retail performance in February-March was excellent. Behind this, Gasgoo noted that in March, the state arranged 300 billion yuan of ultra-long-term special treasury bonds to support consumer trade-ins, with the main goal of promoting consumption, which undoubtedly provided strong support for the passenger car market. Driven by the state's consumption promotion policies, many provinces and cities have introduced and gradually implemented corresponding consumption promotion policies. Combined with the full launch of offline activities such as auto shows and OEM subsidies, the car market started well in March. Moreover, as the pre-holiday internal combustion engine vehicle consumption wave turned into the post-holiday NEV consumption wave, the NEV penetration rate continued to rise, making NEVs the main driving force for the recovery of the spring passenger car market. Looking ahead to the car market trend in April, combined with CPCA analysis, under the support of multiple favorable factors, the passenger car market is expected to continue its steady growth trend. On the one hand, in terms of the number of working days, April has 22 working days, the same as the same period last year, which is conducive to the steady growth of car market production and sales. On the other hand, the price war in the spring of 2024 led to a severe market downturn in February-March. With the implementation of the 2024 scrappage and renewal policy on April 24, the car market gradually recovered after April last year, and this April still has a certain low base promotion effect. In addition, driven by the state's consumption promotion policies and corresponding policies in many provinces and cities, spring auto show offline activities will fully activate the market atmosphere and accelerate the gathering of popularity. "The timely holding of the Shanghai Auto Show and the model release activities during the promotion period of the Shanghai Auto Show, combined with the implementation of local consumption promotion policies, will undoubtedly become a catalyst and trigger point for promoting domestic car consumption," Cui Dongshu said. In addition, this year's five-day May Day holiday is a good time for driving trips. In recent years, self-driving tours have continued to be popular, and the self-driving experience is better with high-level assisted driving. Recently, new products have enhanced cost performance by adding configurations without increasing prices, which will also drive the demand growth of new purchase and replacement groups. In addition, the CPCA also pointed out that due to drastic changes in the external environment and the unexpected pressure of widespread tariff increases, consumer sentiment has also been affected to some extent. However, the state has long had a policy orientation to promote domestic demand, so the trend of our development being driven by both domestic and external demand is becoming increasingly obvious, and the effect of stabilizing domestic demand in the passenger car market will continue to be reflected. Focusing on the export level, the institution believes that China's car exports to the US account for a negligible proportion, especially since domestic brands are not sold in the US at all, so China's domestic brand cars will not be affected by US tariff increases. Of course, it also pointed out that this round of tariff adjustments may affect the production and construction layout of Chinese brands in some overseas bases in the short term, but Chinese cars in the future globalization strategy have development space. "With the deepening of cooperation in the Belt and Road and global south countries' markets, we need to develop passenger car categories that meet local demand, especially encouraging the local manufacturing and popularization of NEVs, while highlighting China's industrial advantages in internal combustion engine vehicles to achieve energy conservation and emission reduction in the global market."

[SMM Analysis] On February 27, Xiaomi launched the SU7 Ultra, priced at 529,900 yuan. At 00:24 on February 28, Xiaomi Auto's official Weibo announced that over 10,000 units were pre-ordered within 2 hours of the launch.

[Zhang Xinghai of SERES Sends Internal Letter: Achieving Sales Target of One Million Units Within Three Years] Zhang Xinghai, Chairman (Founder) of SERES Group, outlined the 2025 goal in an internal letter to all employees. Specifically, AITO is positioned in the luxury car segment, the M9 is expected to maintain the top position in luxury car sales, and the overseas market for NEVs is expected to achieve a doubling plan. Zhang Xinghai also stated in the letter that SERES NEVs are expected to achieve a sales target of one million units within three years.

On July 29, AITO, the premium new energy vehicle brand jointly developed by Huawei and SERES, celebrated the production of its 400,000th new vehicle and the delivery of its 70,000th M9 vehicle.

In May 2024, China's domestic passenger vehicle (PV) market retailed 1.71 million units, marking a year-over-year decrease of 1.9% but a month-over-month increase of 11.4%.

In April, China's domestic passenger vehicle (PV) market retailed 1.532 million units, marking a year-over-year decrease of 5.7% and a month-over-month decrease of 9.4%, according to data from the Chi...