中国汽车：3月零售年化销量2070万辆，受高基数拖累同比下降22%；高油价下电动车渗透率回升至54%

Chinese Autos: March SAAR 20.7mn units, volume -22% yoy ashigh base drag persists; EV Penetration recovers to 54% amidhigh oil prices March retail SAAR rebounded sequentially to 20.7mn units,though YoY growthremained weak at -21.8% off a high base.We track mandatory first-time auto insurancevolumes in China, which we believe gives the most accurate read on retail sell-through. Marchretail passenger vehicle sales totaled 1.49mn units, -21.8% yoy. The March retail SAAR of20.7mn units is higher compared with 17.2 mn in January and February 2026, but remainsbelow our estimate of normalized annual demand of c.22mn units.(Links to monthly salesvolume trackers: PV Wholesale, and PV Retail.) Eunice Lee, CFA+852 2123 2606eunice.lee@bernsteinsg.com Ethan Xu+852 2123 2634ethan.xu@bernsteinsg.com March continued to reflect the pull-forward effects of subsidy programs over the pasttwo years and a high comparison base.YoY growth declined to -21.8% in March, versusc.-14.5% in 2026 2M, largely due to the elevated base as subsidies were fully implementedin March last year.That said, SAAR indicated sequential improvement, supported byrenewed local-government subsidy rollouts and increased consumer interest following newmodel launches, leading to improving showroom traffic according to our channel checks.Looking ahead, the Beijing Auto Show and upcoming model launches should offer modestnear-term demand support, though the high base effect is likely to persist until Q4. March EV penetration rebounded to 54.1%,with BEVs accounting for 37.9% and PHEVs16.2%. EV sales declined 17.7% YoY, with BEVs down 12.7% and PHEVs down 27.3%.The rebound in penetration from c.37% in 2026 2M reflects the rollout of new subsidies,consumers gradually adapting to higher purchase taxes, and rising oil prices, which weighedfurther on ICE demand (-26.3% YoY). BYD Group remained the largest EV seller in China butsaw volume and share drop to 185k units and 23.0%. Geely Group ranked second with 95kunits and 11.8% share, followed by Tesla at 55k (6.9%) and Wuling at 41k units (5.0%). OtherEV pure-plays included Li Auto 40k (5.0%), Leapmotor 38k (4.7%), NIO at 23k (2.8%), Xiaomi22k (2.8%), XPeng 22k (2.7%), and AITO 17k (2.1%). Premium brand sales declined by -12.4% yoy, with locally-built premium brands -9.5%yoy and imported premium brand cars -28.9% yoy. Among major traditional premium brands,Mercedes posted the weakest performance with a -31% decline, while BMW declined -25%and Audi -18%. Porsche also reported a -28% drop, while NIO saw +117% growth. Mass-market brand retail sales plunged -23.6% yoy, as they are more vulnerable to the removal ofsubsidies and increase in purchase tax. China’s passenger vehicle exports grew +82.4% yoy in March, with ICE exports +45%and EV exports +149%.EVs make up close to half (c.49%) of total PV exports for the month.Export growth accelerated amid higher oil prices following U.S.-Iran tensions, boostingthe relative attractiveness of Chinese EVs. Our recent webinar noted a sharp increase inEuropean consumer interest in Chinese vehicles over the past two years.(For more: GlobalAutos: Are Europeans ready for a Chinese car? Key webinar takeaways)In March, Chery ledwith 147k units (+71% yoy), followed by BYD with 117k (+74%). Geely maintained the thirdplace with 82k units (+120%), while SAIC ranked fourth with 70k units (+69%). BERNSTEIN TICKER TABLE INVESTMENT IMPLICATIONS We maintain a cautious outlook for the sector entering 2026. The reduction in subsidies and a 5% purchase tax hike on EVsare expected to slow market momentum. This follows strong demand pulled forward into 2024-2025 and a high comparisonbase, while macro headwinds and weak consumer sentiment persist. The industry will also face pressure from material costinflation headwinds. We expect industry wholesale volumes to reach 28-29 mn units, falling 4-8% yoy. We forecast domesticretail demand of 21-22mn units, declining 5-9% yoy. Exports should remain a growth driver, arriving at 6.5-7mn units, growing10-20% yoy. The long term secular growth outlook for EVs remains intact and even though EV transition has come to the mass adoptionphase in China, we forecast domestic EV sales growth will be c.5-10% for 2026 and drive EV penetration to 61%. We believecompetition within the domestic market will remain intense and overseas markets are increasingly important as a strategicgrowth opportunity. For our EV names, we rateBYD and Xiaomi Outperform, andXPeng, Li Auto, and NIO Market-Perform.Within our traditional Chinese OEMs coverage, we rateGeely OutperformandGreat Wall, GAC, and SAIC Market-Perform. Recent research highlights: 8 Apr 2026 - Global Autos: Are Europeans ready for a Chinese car? Key webinar takeaways8 Apr 2026 - EV TRACKER - March 2026: Slow start to 2026, but will higher fuel prices lift sales?2 Apr 2026 - SAIC Q4: Stabilizing, but visibility still modest — Recovery hinges on upcoming launches31 Mar 2026 - China Smartphone Tracker (March): Mo