China's Auto Price War Likely Hurt Automakers' Profitability Despite Higher Sales Growth -- Market Talk

Dow Jones04-16

0247 GMT - China's intensifying auto price war could hurt automakers' profitability despite higher sales growth, UOB Kay Hian analysts say in a research note. UOB raises its 2024 forecasts for China's vehicle sales growth and EV sales growth to 7.5% and 21.7%, respectively, on higher 1Q sales as a result of bigger-than-expected price cuts, stronger exports and stimulus. However, the industry-wide average sale price of personal vehicles in China dropped to a record low of CNY177,000 in March, while the average discount rate hit a record 18.0% during the month, they say. UOB maintains an underweight rating on China's auto sector as carmakers' earnings will likely be pressured. UOB's top sells are BYD, Li Auto and XPeng. (sherry.qin@wsj.com)

(END) Dow Jones Newswires

April 15, 2024 22:47 ET (02:47 GMT)

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