Automotive industry: Continued growth in passenger vehicles Heavy truck industry recovery

Passenger vehicles continued to grow, but inventory began to increase. In January-July 2009, passenger vehicles achieved a year-on-year growth of 30.91%. In terms of subdivided industries, except for the MPV segment, the passenger car industry still maintains a rapid growth trend. The need to remind investors that according to our monthly monitoring of the production and sales data of the car industry, after experiencing the “de-stocking” in the 1-2 quarter, the inventory of both companies and distributors has started to cover up. This means that if the number of inventories continues to climb, there will be a renewed product price war between companies in the second half of the year.

Corporate profitability will increase significantly in the future Despite the recent sharp increase in steel prices, we remain optimistic about the overall profitability of the sedan industry in 2009. Our reasons are mainly as follows: the current international and domestic demand for steel products is slowly rising. Supporting the large-scale increase in steel prices, that is to say, the increase in sales volume, the stable average product price, and the slower cost increase, ensure that the company can maintain rapid and significant growth in profitability in 2009.

The heavy-duty truck industry recovered as expected. For the commercial vehicle segment, we believe that the subcompact market for commercial vehicles has begun to shift from some of the recovery in the first half of the year to a full recovery phase. From July's data, the heavy-duty truck and semi-trailer segment markets recovered significantly. It is also in line with our previous judgment in the May monthly report that "the recovery of the heavy truck industry in the second half of the year is a high probability event." For heavy truck industry related companies, we continue to maintain Weichai Power's "recommended" rating.

Re-adjusting the sales volume and growth rate forecast for 2009 From the perspective of the entire industry, the full recovery of the automotive industry in 2009 has become inevitable. We will increase the sales volume and growth rate of the previous industry in 2009 by a certain margin, we will be the automotive industry, The passenger car and commercial vehicle industry's growth rate in 2009 was 18.71%, 23.97%, and 5.48%, respectively, from previous forecasts. It was revised up to 26.34%, 32.12%, and 11.41%, respectively. It is estimated that annual sales of cars will be 11.83 million.

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