HK Stock Market Move | Car stocks fell across the board today. It is expected that car sales in January will decrease on a month-on-month basis. Some institutions warn that intensified competition in the car market may lead to a price war.

Car stocks fell across the board today, as of press time, Great Wall Motor (02333) fell 3.96% to 12.6 Hong Kong dollars; LI AUTO-W (02015) fell 3.56% to 90.75 Hong Kong dollars; XPENG-W (09868) fell 3.52% to 57.6 Hong Kong dollars. On the news front, on January 17, the China Passenger Car Association preliminarily estimated that the total retail market of passenger cars in January was about 1.75 million units, a year-on-year decrease of 14.6% and a month-on-month decrease of 33.6%. Cui Dongshu, the Secretary-General of the association, previously stated that the scale of new energy vehicles is experiencing explosive growth, with significantly increased batch sizes and obvious cost reductions per vehicle, while the competitive landscape among industry leaders remains unstable. Therefore, in this high-growth market, the "price war" is expected to continue until 2025, and it will be extremely fierce. BOCOM INTL stated that benefiting from the trade-in old for new policy, the automotive industry in Shanxi Guoxin Energy Corporation is showing strong growth momentum in 2024. The penetration rate of new energy vehicles reached 47% in the first eleven months of 2024. With more extended-range/hybrid models being released, the bank expects the penetration rate of new energy vehicles to further increase in 2025. However, caution is needed as the automotive market enters a sales off-season after a sales surge in December 2024, leading to intensified competition and triggering a price war.