The Zhitong Finance App learned that Societe Generale Securities released a research report saying that domestic passenger car exports have shown a rapid growth trend since 2021. According to China Automobile Association data, 2026 M1-M8 passenger car exports were 6.245 million units, +73.0% over the same period last year. The bank suggests focusing on investment opportunities for leading export-type car companies. For export-type car companies, the revenue and gross profit contribution from overseas markets has surpassed that of the domestic market. Currently, the overseas market space is vast. Combined with 2026Q3, prices of major raw materials are expected to end the general rise. Profitability is expected to recover further in the second half of the year, and the export volume and performance flexibility of leading export car companies can be expected.
Societe Generale Securities's main views are as follows:
Passenger car exports are booming, and new energy is contributing a major increase
Domestic passenger car exports have shown a rapid growth trend since 2021. According to data from the China Automobile Association, the 2026 M1-M8 passenger car exports were 6.245 million units, +73.0% over the same period last year. By power type, the 2026M1-M8 pure electric exports were 2.053 million units, +116.2% year-on-year, plug-in exports were 1.301,000 units, +160.8% year over year, total exports of new energy vehicles were 3.354 million units, +131.6% year over year, and 2.89 million fuel vehicles were exported, +33.8% year over year. Renewable energy showed a doubling growth rate, and fuel vehicles also had a high growth rate. Judging from the share of power type exports, 2026M1-M8 pure electricity exports account for 32.9%, plug-in hybrid accounts for 20.8%, and total new energy accounts for more than 50%. From the perspective of export growth, among the top 10 M1-M8 incremental destinations in 2026, the increase in exports to Russia, Algeria, and Kyrgyzstan was mainly fuel-fuel vehicles, while the increase in exports to other countries was dominated by new energy vehicles.
Overseas space is vast, and car companies' localization strategies are accelerating
Global automobile sales in 2025 are about 98 million units. Excluding the local Chinese market and the US, India, Japan, and South Korea, which are difficult to enter, there is still an accessible market space for about 35 million vehicles overseas, and the overseas space is vast. Recently, trade between China and Europe reached a new agreement. The EU has adopted quota measures for Chinese hybrids, and domestic car companies have accelerated localization strategies. For example, BYD said it will invest in manufacturing on a large scale in Europe. At the same time, BYD plans to start large-scale production in 2026Q4. At the same time, BYD will also establish second and third plants in Europe. Currently, France has entered the candidate list for BYD to build a factory in Europe, and the company is also planning to recruit in Europe and increase the number of local employees to 40,000 in 2030. Zero Sports has signed a strategic cooperation agreement with Stellantis and established a joint venture. The combination of Zero Sports Auto's technology and cost advantages with Stellantis's channel advantages will help Zero Sports Auto accelerate the development of the local market. Geely and Ford reached an agreement and set up a joint venture in Spain. Through capacity sharing, the joint venture will build various energy vehicle products under the Ford and Geely brands for the European market and accelerate the implementation of Geely's European localization strategy. The construction of local production capacity can effectively circumvent the restrictions of relevant policies and drive car companies to achieve continuous growth in local sales.
Overseas markets contribute the main revenue and gross profit, and the impact of export tax rebate rate adjustments is limited
As car companies expand their channels and launch products in overseas markets, the share of overseas revenue and gross profit of car companies continues to increase. For example, BYD's share of overseas revenue/gross profit in 2025 was 38.7%/42.4%, and 2026H1 has increased to 52.6%/60.6%. Overseas revenue accounts for more than half, and gross profit accounts for more than 60%. In this context, the impact of domestic sales on the revenue and performance of car companies is gradually decreasing. Overseas markets are the main source of revenue and profit for car companies, and the share of revenue and gross profit is expected to increase further. On October 12, 2026, the Ministry of Finance and the State Administration of Taxation issued a notice on adjusting the export tax rebate policy for some products, which mentioned that starting April 1, 2027, the value-added tax export rebate rate for new energy vehicles will be reduced from 13% to 9%. This policy adjustment has long-term positive significance for new energy export trade, such as curbing the spillover of low price competition, easing trade frictions, and supporting the high-quality development of the industry. Car companies are expected to hedge against the impact by adjusting the sales price of products at overseas terminals and transferring price pressure to dealers or suppliers. The short-term shortfall in vehicle exports has been exhausted, and the sentiment level is expected to recover.
The pressure on raw material prices has eased, and profitability is expected to recover further
The gross margins of BYD/Great Wall Automobile/Geely Automobile/Chery Auto in 2026Q2 were 18.9%/18.3%/18.4%/16.1%, respectively, +0.1pct/-0.1pct/+0.9pct. In the context of raw material prices still rising in 2026Q2, car companies adjusted their product structure by increasing exports and launching new products, and improving overall gross margins. Looking ahead to the second half of the year, against the backdrop of declining lithium carbonate prices and stable commodity prices, the increase in the share of exports is expected to further improve the profitability of moped companies.
Risk warning: macroeconomic growth falls short of expectations, changes in overseas market policies, sharp rise in raw material prices