GTHT Securities released a research report stating that price competition in China's passenger vehicle market continued to ease in October, with the industry gradually shifting from price wars to refined operations. The "anti-involution" trend is expected to persist into Q4. Structural differentiation within the sector has intensified, as evidenced by significantly lower discount rates for domestic new energy brands compared to joint-venture brands, indicating that brand positioning and product strength have become key determinants of pricing strategies. The firm maintains an "Overweight" rating on the industry.

Key observations from GTHT Securities include: 1. **Market-wide Price Stabilization**: In October, the average discount rate for passenger vehicles stood at 18.5%, down 0.3% month-on-month (MoM), while average wholesale prices dipped slightly by RMB 500 MoM but remained flat year-on-year (YoY). This moderation in price competition during the traditional "Golden September, Silver October" sales season reflects the market's transition toward operational efficiency.

2. **NEVs Outperform ICE Vehicles**: Discount rates for traditional internal combustion engine (ICE) vehicles held at 26.3%, with average prices dropping RMB 900 MoM but rising RMB 1,600 YoY. In contrast, new energy vehicles (NEVs) maintained stable discounts at 12.8%, with negligible MoM price changes and a YoY increase of RMB 1,300. This underscores NEVs' dual advantages in cost control and market demand, enabling stronger brand premium potential.

3. **Divergence Among Brands**: Domestic NEV brands like AITO and XPeng saw discounts below 10%, with AITO's average price rising RMB 1,900 MoM. Joint-venture brands (e.g., FAW-Volkswagen, Buick, GAC Honda) reported MoM price declines and discounts exceeding 20%. Luxury brands Audi and Mercedes-Benz saw discount rates rise 1.2% and 1.1% MoM, respectively, while average prices fell sharply by RMB 5,700 and RMB 5,100 MoM.

4. **SUV Segment Pressure**: Intense competition persisted in the SUV market, with models like Tayron, Mercedes-Benz GLC, and Audi Q5L hitting record-low prices (down RMB 4,200–8,300 MoM) and higher discount rates (up 1.1%–1.9% MoM). Others, such as Tiguan L and Enclave Plus, saw discounts climb to 25.7% and 29.2%, respectively.

**Risks**: Potential shortfalls in new vehicle sales and significant raw material cost increases.