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Investors have gradually turned positive on China’s auto sector on improving store traffic and potential policy stimulus, Morgan Stanley said in a report.
However, the bank’s survey showed substantial difference in brands/stores’ performances during the Chinese New Year holidays, and the overall new order intake stayed moderate, suggesting that extra promotions and new models are needed, it said.
While the industry is all focusing on the electric vehicle competition, the bank believes that gasoline vehicles will not be fully immune from the fallout, and expected that JV brands sooner or later will need to adopt a more aggressive pricing strategy, according to the note. Among them, BMW China previously announced a one-off rebate of 6,000 – 7,000 to motivate dealers to meet sales targets.