Understanding the Market | Auto Stocks Turned Down in the Afternoon, Brilliance China Fell Over 4%, UBS Said Increased Tax Exemption Threshold for New Energy May Be Unfavorable to Market Sentiment
Automobile stocks turned lower in the afternoon, with Brilliance China falling over 4%. UBS pointed out that the increase in the tax exemption threshold for new energy vehicles may affect market sentiment. Although most automakers can meet the new standards, policy updates may be stricter. The Passenger Car Association is expected to raise its growth forecast for the automotive market in 2025. Shenwan Hongyuan stated that the end of automobile subsidies and the expiration of the tax exemption policy for new energy vehicles next year will increase the cost of purchasing vehicles, and there may be a rush to buy in the fourth quarter
According to the Zhitong Finance APP, automotive stocks surged significantly in the morning but collectively turned down in the afternoon. As of the time of publication, Brilliance China (01114) fell 4.3% to HKD 3.78; Great Wall Motors (02333) fell 2.75% to HKD 15.54; GAC Group (02238) fell 1.86% to HKD 3.17; Li Auto-W (02015) fell 1.18% to HKD 87.9.
On the news front, the Ministry of Industry and Information Technology and two other departments previously issued a document clarifying the technical requirements for the exemption of vehicle purchase tax for new energy vehicle products from 2026 to 2027. UBS released a research report stating that while most automakers should be able to meet the new standards, the latest policy updates may appear stricter, negatively impacting market sentiment. Although the policy tailwinds in mid-2024 may turn around in 2026, investors remain generally optimistic about the new car launches of individual companies.
In addition, Cui Dongshu, secretary-general of the Passenger Car Association, recently stated that the association raised its annual market expectations in August and will further adjust its forecast after discussions in late October, expecting to revise the growth forecast for 2025 upward. Shenwan Hongyuan recently released a research report stating that automotive subsidies are gradually coming to an end and the exemption of purchase tax for new energy vehicles will end next year, which will significantly increase the cost of purchasing vehicles, potentially leading to a wave of market rush for purchases entering the fourth quarter
