Fitch Bo Wah has released the 2024 Credit Outlook Report for the automotive industry, forecasting a "moderate stability" outlook for the automotive industry in 2024. It is expected that the automotive industry will continue to face challenges of price wars and upgrading to intelligent technology. The report mentioned that in 2023, both production and sales of automobiles in China reached a historical high, surpassing 30 million units, with double-digit growth in passenger and commercial vehicle sales. The export volume of automobiles surged to the top globally, with a significant year-on-year increase in the export volume of new energy vehicles, although international policy risks are intensifying. Looking ahead to 2024, Fitch Bo Wah predicts that the overall sales of automobiles in China will maintain a low-speed growth of 3% to 5%, with similar growth rates for commercial and passenger vehicles, but there will be significant differentiation in sales growth rates between brands and models. The automotive industry will face the dual challenges of price wars and rapid replacement of intelligent technology, leading to further differentiation in sales between new energy vehicles and traditional fuel vehicles. In addition, the growth rate of automobile exports may slow down, but can still maintain high double-digit growth. Fitch Bo Wah stated that in the upstream sector, the prices of core raw materials for electric vehicle batteries, such as lithium carbonate, have fallen in 2023, and bulk raw material prices such as steel and rubber have also declined, along with a decrease in shipping costs, reducing costs for manufacturers within the industry. Supply chain intelligentization has seen the sales growth of mainstream components outpacing that of original equipment manufacturers, with products such as laser radar seeing a rapid increase in sales. Fitch Bo Wah believes that despite intense price wars within the industry in 2023, rapidly increasing sales of domestic brands, and significant price decreases in upstream raw materials, the majority of manufacturers have shown strong net profit performance. However, it is expected that the room for cost reductions in the industry's upstream sector will narrow in 2024, and price wars will erode the profitability of car companies. Under the trends of electrification and intelligentization, original equipment manufacturers with global production and diversified sales advantages will continue to improve profitability, while companies with outdated technology and lower-than-expected sales volumes will face an accelerated risk of elimination.