GF Securities: Cross-country vehicles are expected to continue to slice into the market share of urban SUVs. It is recommended to pay attention to Great Wall Motor (601633.SH) and others.

GF SEC released a research report stating that technological innovation is expected to continue to drive the domestic off-road vehicle market to further segment the urban SUV market share. In the overseas market, Chinese brands are expected to achieve continuous market share growth by leading in the PHEV technology. Considering the technical accumulation, brand reputation, and overseas layout of car companies in the non-load-bearing SUV sector, the firm recommends focusing on Great Wall Motor (601633.SH, 02333), BYD Company Limited (002594.SZ, 01211), and Chery Automobile (810711.BJ). GF SEC's main points are as follows: Introduction: Taking into account the current technical changes in the off-road SUV market, diverse consumer demands, and the differentiation of off-road scenarios, the firm defines the non-load-bearing body and overall off-road market as follows: 1. Non-load-bearing body SUV market: equipped with a non-load-bearing body, mechanical four-wheel drive, and basic three-way differential lock, capable of adapting to all terrains and scenarios; 2. Overall off-road SUV market: includes both the non-load-bearing body SUV market and the urban chassis off-road appearance SUV market. Review: High-quality domestic supply reduces purchasing and operating costs, leading to continuous expansion of the off-road SUV market. The non-load-bearing body SUV market has continued to expand since 2021, with a significant decrease in import market share. According to compulsory insurance, non-load-bearing body SUV sales reached 346,000 units in 2024, a year-on-year increase of 48.4%, mainly due to the reduction in purchasing and operating costs brought about by high-quality domestic supply represented by tank models. In the overall off-road SUV market, high-quality supply meeting personalized demands combined with lower operating costs has continually captured urban SUV market share since 2020. In 2024, the overall off-road SUV market (including non-load-bearing body SUVs) had sales of 764,000 units, up by 87.3% year-on-year. In terms of competition, Great Wall Tank brand dominates the non-load-bearing body SUV market, while Chery's Jetour brand continues to increase its market share in the overall off-road SUV market. Overseas: Decreasing concentration in the non-load-bearing body SUV market, increasing demand for PHEV off-road vehicles. According to Marklines, the overseas non-load-bearing body SUV market remained at over 1.5 million units between 2023-2024. In 2024, Toyota/Kia/Jeep/Chevrolet/Ford held market shares of 19.9/15.2/11.5/10.5/9.6%, with CR3/CR5/CR7 at 46.6/66.7/82.4%, decreasing by 6.2/4.3/1.8 percentage points, respectively, since 2020. Brand concentration has been decreasing over the years. With models like Great Wall Tank accelerating their overseas expansion, industry concentration may further decrease. Benefiting from hybrid technology lowering operating costs, overseas demand for non-load-bearing PHEV SUVs is rapidly increasing. In 2024, Jeep PHEV version sales reached 64,000 units, with PHEV sales accounting for 36.0%. Outlook: Domestic technological innovation in off-road vehicles is expected to further segment the urban SUV market share and increasing overseas shares are worth looking forward to. In the domestic market, Great Wall Motor's Hi4-Z technology innovation is expected to further reduce urban operating costs, opening up growth opportunities. According to compulsory insurance, Tank 500 Hi4-Z was launched in January 2025, and despite higher purchasing costs compared to Hi4-T, its sales have continued to exceed Hi4-T, accounting for over 60% of Tank 500 sales. Tank brand's overseas market share continues to increase, with a 24-year overseas market share of 5.3% excluding the US, up 2.9% year-on-year. Tank brand has proven its product superiority compared to foreign brands in the domestic market, and looking ahead, the brand is expected to further increase its overseas market share by leveraging its cost-effectiveness and leading role in PHEV technology. Risk Warning: Declining industry prosperity; uncertain tariff policies; intensified industry competition.