Market Insight | XPENG-W drops more than 5%, leading the decline in automobile stocks. Domestic terminal consumption in May has not improved yet, and multiple countries have announced additional tariffs

According to the Wise Finance APP, automotive stocks fell across the board in the morning session. As of the time of publication, XPENG-W (09868) fell by 5.25% to HKD 30.7; Li Auto-W (02015) fell by 4.29% to HKD 74.75; Great Wall Motors (02333) fell by 2.92% to HKD 11.32.

Guojin Securities pointed out that as of May, domestic terminal consumption has not improved. After the policy of trading in old cars for new ones was released, terminal consumption has not been activated. Since the beginning of the year, the market has been concerned about the vitality of automotive consumption. We believe that the market has already had sufficient expectations for the fluctuation of automotive consumption vitality in 2024. In 2022-2023, automotive consumption exceeded expectations for two consecutive years. In 2024, the automotive sector will have more opportunities from structural changes. Although terminal consumption is weak, the market share and sales volume of domestic cars are still growing, with the growth space of domestic car market share still around 40-50%.

In addition, recently, the United States and Turkey have successively announced additional tariffs on imported cars from China. On May 14, the U.S. announced the results of a four-year review of the 301 tariffs on China, stating that it will increase the tariff on imported electric cars from China from 25% to 100%. On June 8, Turkey announced an additional 40% tariff on cars imported from China. Furthermore, the European Commission was reported to impose temporary tariffs on Chinese electric cars starting from July 4