China Automotive Technology and Research Center Co., Ltd.

CATARC (Tianjin) Auto Information Consulting Co., Ltd.

Issuing: January 17, 2020

The 3rd Issue (Issue No. 279)

Review of Chinese Automotive Industry

——Weekly Analysis on Hotspots

Main Contents

1、Development Environment

2、New Energy Industry

3、ICV Industry

4、Development of Enterprises

3

Development Environment

Policy

信息咨询中心

Macro

• The rules for the use of tire monitoring system on passenger vehicles in production had implemented on January 1,2020

According to the relevant requirements of Performance Requirements and Test Methods of Tire Pressure Monitoring System for

Passenger Cars, all passenger cars in production should be equipped with TPMS systems since January 1, 2020. This also means

that the passenger cars without TPMS can not be sold since 2020.

• Fuel Consumption Evaluation Methods and Targets for Passenger Cars will be implemented in 2021

The Fuel Consumption Evaluation Methods and Targets for Passenger Cars, which was issued on December 31, 2019, will be

implemented on January 1, 2021. This is the Stage-V fuel consumption standard for passenger cars in China for 2025. The main

changes include that the operating conditions will be switched from NEDC to WLTC; the scope of application will be expanded,

and alcohol-ether fuel vehicles will be included in the management scope. In addition, the fuel consumption evaluation system and

new energy accounting methods of the models will also be adjusted.

• The PPI in December 2019 declined 0.5%

In December 2019, PPI decreased by 0.5% comparing with that of the same month of previous year; the purchase price of industrial

producers decreased by 1.3%. In 2019, PPI fell by 0.3% year-on-year, and the purchase price of industrial producers fell by 0.7%. In

2019, the ex-factory price of the automobile manufacturing industry decreased by 0.7% year-on-year.

• CPI in December 2019 rose by 4.5%

In December 2019, the CPI increased by 4.5% year-on-year, of which, transportation and communication prices fell by 0.7% year-

on-year. In 2019, consumer prices nationwide increased by 2.9% over the previous year, of which transportation and

communications prices fell by 1.7% year-on-year.

Main Contents

1、Development Environment

2、New Energy Industry

3、ICV Industry

4、Development of Enterprises

5

NEV Industry

Enterprise

• Miao Wei: New Energy Vehicle 2035 Program and Double Credit Management Measures will be issued in the First Halfof 2020

At the 2020 Forum of China EV100, Miao Wei, the Minister of the Ministry of Industry and Information Technology revealed that

the establishment of New Energy Vehicle Industry Development Program (2021-2035) had been basically completed and is

expected to be released in the first half of this year.

• Geely and Mercedes-Benz formed JV for Smart

On January 8, 2020, Geely Holding and Mercedes-Benz AG announced that they had formally established the global JV (Smart

Automobile Co., Ltd.) for Smart brand for its global operating and promote the transformation and upgrading of the Smart brand.

The joint venture company has a registered capital of Rmb 5.4 billion yuan. Its global headquarters is located in Hangzhou Bay

New District, Ningbo, China, and the marketing centers had been set up in China and Germany respectively.

• FAW and DFM jointly establish NEV investment company

On January 3, a subsidiary of FAW Group and Dongfeng Motor Corporation established a joint venture (Beijing Guochuang New

Energy Vehicle Equity Investment Fund Partnership Limited), with business scope including non-secure business investment,

investment management, and investment consulting.

• Dongfeng Peugeot Citroen’s new energy project will be completed in May and the new plant will build 4008/ TianyiPHEVs

It is reported that the new energy passenger car project of the Chengdu branch of Dongfeng Peugeot Citroen will be completed in

May 2020. The new plant will own the annual production capacity of 11,000 units, while its annual production capacity of fuel

vehicles will also be reduced. At present, the Chengdu branch is producing the Peugeot 4008, 5008 and Citroen Tianyi models. In

the future, it will start the manufacturing of Peugeot 4008 and Tianyi plug-in hybrid models.

• Byton receives 60,000 orders for M-Byte SUVs and they will be delivered in China in 2020

Byton is expected to start the delivery in Chinese market in 2020 and in US and European markets in 2021. Currently, it had

received 21,000 orders in the European market and a total of 60,000 orders worldwide.

• Svolt builds the world's first digital battery enterprise platform

On January 8, Svolt and Huawei signed a contract for in-depth cooperation in many areas of enterprise Cloud technology

applications. The company is expected to become the world's first digital battery enterprise platform.

Policy

6

Trend of the Price of Electrolytic Cobalt (Rmb 10,000/ton) Trend of the Price of Graphite Electrode (Rmb/ton)

Trend of Commodity Index of Lithium Carbonate Trend of Rare Earth Index

NEV Industry

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Main Contents

1、Development Environment

2、New Energy Industry

3、ICV Industry

4、Development of Enterprises

8

ICV Industry

Enterprise

• Hongqi L2.5 models will be launched, and mass production of L3 autonomous driving models will be achieved by 2020

On January 8, FAW expressed that the mass production of Hongqi L3 autonomous driving models will start in 2020 and the mass

production of L4 models will commence in 2021. The new Hongqi H9 will use L2.5 autonomous driving system and will be

launched in May 2020.

• Human Horizons and Fudan University jointly study brain-like artificial intelligence science

Human Horizons announced that it will cooperate with Fudan University's Institute of Science and Technology for Brain-inspired

Intelligence (ISTBI) and the Big Data Research Institute to conduct joint research on artificial intelligence's low-level algorithms in

the areas of autonomous driving and intelligent recognition analysis and the massive experimental data analysis.

• Byton cooperates with South Korea's SK Telecom to expand digital experience in cars

Byton announced that it had reached the cooperation agreement with SK Telecom. The two parties will explore the integration of

SK Telecom's digital products and services in Byton models to meet the needs of local consumers in South Korea.

• Baidu and Wind River collaborate to develop self-driving car solutions

On January 7, Wind River, a US-based provider of intelligent edge software, announced that it established cooperation relationship

with Baidu to develop self-driving car solutions.

• Sogou map releases AR navigation function: Real-time distance calculation and collision warning

On January 9, the Sogou Map AR navigation function was formally launched. Through collecting data with the camera of the

mobile phone, Sogou Map can display real-time images and then use 3D reconstruction and overlay rendering to label the

navigation information to achieve basic AR navigation function.

Main Contents

1、Development Environment

2、New Energy Industry

3、ICV Industry

4、Development of Enterprises

10

Development of Enterprises

Passenger

Vehicle

Parts and

Components

• BAIC Group released "Great Beijing" brand strategy: The Sales Target for 2020 is 2.35 million Complete Vehicles

On January 6, BAIC released the Big Beijing brand strategy with "Beijing" and "BEIJING" as its core. The "Great Beijing" brand will

become a "World-class Green Smart Mobility” brand with sales targets 500,000 units and 1 million units in 2025 and 2030

respectively.

• GAC Group's sales declined by 3.99% in 2019 and will challenge 8% year-on-year growth in 2020

The cumulative sales volume of GAC Group in 2019 reached 2,062,160 units, a decrease of 3.99% year-on-year. The group will

challenge the annual sales growth target of 8% in 2020.

• FAW Hongq’s sales target: To reach 800,000 to 1 million units in 2030

The FAW Hongqi announced its sales target for the next 10 years. The sales target of the company for 2030 is 800,000 to 1 million

units. At the same time, Hongqi also announced a new product program. It will launch a total of 21 new models in four series

(L/S/H/Q) by 2025, including 18 new energy vehicle models. Of which, the H9, an executive car positioned as the C +class model,

will be produced in May 2020.

• SAIC GM Wuling’ s 2020 Program: To launch 6 new Baojun models

SAIC-GM-Wuling will focus on the development of four segments (Wuling, New Baojun, Baojun and New Energy) in 2020. Of

which, New Baojun will launch six new models based on the existing four models. In terms of new energy, SAIC-GM-Wuling still

believes that the two-seat new energy vehicles is the solution for short-distance urban commuting.

• China Fuyao expands the plant in U.S.

On January 12, it was reported that Fuyao Glass's U.S. company will invest an additional USD 46 million(about Rmb 320 million

yuan) in the Dayton plant in Ohio.They will be mainly used to purchase equipment for a new production line to increase the

production capacity of auto glasses.

• Mass production of the JV between Hella Light and BHAP in China started

On January 9, Hainachuan Hella Electronics (Jiangsu) Co., Ltd., a joint venture established by Hella Light and Hainachuan

Automotive Parts in China, started the business. The plant had began mass production of sunroof control units at the end of last year,

and the mass production of the electronic components for auto lights will start a few months later. Subsequently, the product portfolio

will be gradually expanded to include components for energy management and driver assistance.