Industry growth slows down, and market structure is divided in competition In the January-February period of 2011, the sales of the auto industry was 3.161 million, an increase of 9.93% year-on-year, and the market structure slowed down at the same time as the market structure was divided: (1) High-end passenger car use Demand for the car market has grown steadily; (2) Europe and the United States have increased their market share; Japanese companies and their own brands are under pressure; (3) The micro-vehicle market has withdrawn from the adjustment phase due to industrial policies; (4) The increase in the quantity of logistics heavy trucks requires time to be absorbed. The segmented market is worthy of attention; (5) the demand of the bus market is difficult to support the growth of the large and medium-sized passenger market; (6) the consumption upgrade of the light vehicle commercial vehicle market continues; (7) the performance of parts and components is closely related to the supporting business, export The development of the market deserves attention.

The dominant enterprises in market differentiation are the “vanes”. We have judged that the high growth of domestic automobile ownership and the development of urban construction have appeared a certain degree of mismatch, which will promote the increase of the cost of vehicles, plus the withdrawal of preferential policies of the industry. The demand of the domestic low-end market will be affected to a certain extent. Therefore, we believe that the level of sales growth in the industry will experience a certain degree of decline. We give the industry a "hold" rating.

Although the growth rate of the industry is declining, the market structure will be divided in competition: (1) the growth rate of the mid-to-high end market is higher than the growth level of the industry; (2) the growth level of enterprises with competitive advantages such as products, technologies, and channels And the profitability will be higher than the industry level; (3) Advantageous enterprises are also the driving force for the consolidation and optimization of industry resources. Therefore, we believe that the market should pay more attention to the excess returns from the growth of advantageous companies.

In combination with the auto market performance of the global auto giant Japan Toyota, we believe that when the industry leaders are in the growth stage, their investment returns are significantly higher than their industry and society average. The leader in China's automotive industry is currently in an expansion phase of its market share. Its product and technology advantages will also provide a solid foundation for its overseas market expansion. They have the potential to become industry oligoguarantees, and we think the market should be High growth gives it a high valuation.