China's auto sector is likely to face multiple challenges this year, Bernstein
analysts say, maintaining a cautious outlook. The reduction in government
subsidies and a 5% purchase tax hike on EVs are expected to slow market
momentum, following a high base with demand pulled forward into 2024-2025. Macro
headwinds and weak consumer sentiment persist, they note. The auto sector will
likely also face pressure from material cost inflation headwinds, they say.
Sector sales volumes could fall between 4% and 8%, to 28 million to 29 million
units this year, they add. Among the EV makers, Bernstein rates BYD and Xiaomi
at outperform
