UBS Gong Min: It is expected that the wholesale growth rate of passenger cars in China will slow down from 11% in 2025 to 3% in 2026.

Gong Min, director of China's automotive industry research at UBS Investment Bank, recently published a report on the Chinese automotive industry, stating that by 2026, the domestic automotive industry will see potential changes in new energy vehicles being subject to a 5% purchase tax, as well as subsidies for scrappage and old-for-new schemes. Based on the planned implementation of the 5% purchase tax and the partial continuation of scrappage subsidies as the benchmark scenario, UBS expects the growth rate of passenger vehicle wholesale to slow from 11% in 2025 to 3% in 2026, and the growth rate of new energy vehicles to decrease from 28% to 15%. In a scenario of overall sales slowdown, exports and product structure upgrades may be two positive factors. "Regarding the slowdown in domestic demand and the ensuing price competition intensification, we believe that the market may need time to digest; however, in the medium to long term, continuous technological innovation, product structure upgrades, and global expansion will remain the growth drivers for Chinese automotive companies," the report said.