CITIC Construction Investment: European and American cars need to significantly improve the layout of Chinese brands in emerging markets
The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that demand in the European market in the two-wheeler sector picked up markedly after the Euro5+ transition period, demand in emerging markets grew steadily, Japanese and Indian companies achieved growth, European and American brands continued to decline, and the unit price, individual profit and profit margin performance of different brands were divided; demand from four-wheelers in North America continued to recover moderately, and European demand was clearly picking up. Polaris, Bombardier, and Kawasaki benefited from a low base and optimized inventory growth. The car continued to lose money and gradually fell behind. Looking ahead to the whole year, overseas motorcycle demand will continue to grow, Japanese companies guide the motorcycle business to continue to grow, and Chinese companies are expected to seize share in the global market; the four-wheeler market is expected to grow in the medium to long term.
CITIC Construction Investment's main views are as follows:
Two-wheelers: Both mature and emerging markets are growing, and Japanese and Indian companies are showing strong performance
The 2026Q1 European Euro 5+ transition period ended, with a marked recovery in registration volume (+14.3%/+26.9%/+43.9%/+9.8%/+15.2%/-16.6%, respectively), Southeast Asia remained steady (Indonesia, Vietnam and Thailand were -4.1%/+8.3%/+2.9%, respectively), and India and Latin America maintained a high growth trend (India, Pakistan and Amir synchronized +26.4%/+20.6%/+35.9%, respectively). Benefiting from growing demand in emerging markets+the share of mature markets, Japanese and Indian brands have achieved continuous growth in sales and revenue in local and export markets; demand in high-end markets such as Europe and the US is under pressure, and competition is intensifying, and sales of local brands are under pressure. The motorcycle consumption structure has changed, competition in mature markets has intensified, and the unit prices, individual profits, and profit margin performance of European, American, Japanese, and Chinese companies have diverged.
Four-wheelers: demand in Europe and the US is growing, and the performance of leading brands is divided
Benefiting from the low base effect and the impact of early interest rate cuts to stimulate consumption, demand in North America continued to grow in Q1, and the profit margins of leading manufacturers rebounded due to the low base. Q1 Polaris Power Sports business revenue increased 14% and gross margin increased; Bombardier's revenue increased by more than 30%, and gross margin increased; Yamaha's revenue continued to decline, and profits continued to lose a lot; Kawasaki all-terrain vehicle volume and revenue increased sharply; Textron special vehicle revenue declined in double digits, and profit margins rebounded steadily.
Chinese enterprises: a new journey of globalization, Chunfeng/Taotao/Linhai continue to grow
In 2026Q1, Chinese companies actively laid out overseas markets to seize global market share. Chunfeng/Taotao/Linhai's revenue and profit continued to grow. Among them, Taotao's revenue scale exceeded 1 billion yuan for four consecutive quarters. At the same time, Qianli/Taotao/Lutong began to lay out AI, robotics, semiconductors, etc., and Chinese motorcycle companies gradually opened up a second growth curve based on the growth of their main business
Outlook: Japanese companies guide the continued growth of motorcycles, and the four-wheel brand camp will be divided
In terms of two-wheelers, Japanese companies predict that motorcycle volume will continue to grow in FY2026. After two consecutive years of decline, Harley expects North American brands to stabilize in 2026; it is expected that competition in the global market will continue to intensify, and Chinese companies are expected to seize share in the global market. In terms of four-wheelers, the overall demand in the industry has recovered, inventory levels of leading brands have been optimized, and second-tier brands such as Kawasaki and Chunfeng are actively deploying, while Yamaha is gradually falling behind; Taotao's dual brand layout is expected to continue to seize the golf cart market, which is expected to outperform the industry and leading brands such as E-Z-GO and Yamaha, and continue to increase in share.
Investment advice
The power sports industry is on a fast track of growth. Consumption upgrades and increased demand for leisure and entertainment have boosted the penetration of all-terrain vehicles and medium- and large-displacement motorcycle products. Chinese motorcycle companies have improved their product strength in recent years, and their cost performance advantages are obvious. They are expected to seize overseas market share. The product structure is continuously optimized, and market share and profit margins continue to increase. We recommend Chunfeng Power, a leading all-terrain vehicle exporter, and the expansion from high-end amusement to the mass mobility sector; recommend Taotao Auto Industry, a strong brand of golf carts and a new army of humanoid robots; and focus on Chinese motorcycle exporters such as Loncin GM.
Risk warning: Overseas demand falls short of expectations, risk of freight and exchange rate fluctuations, trade friction, and the risk of additional tariffs.