China's Auto Sector Likely Faces Multiple Challenges This Year -- Market Talk

Dow Jones05-06

0439 GMT - 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.(jiahui.huang@wsj.com; @ivy_jiahuihuang)

(END) Dow Jones Newswires

May 06, 2026 00:39 ET (04:39 GMT)

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