Auto stocks surged significantly in morning trading but collectively turned lower in the afternoon session. As of press time, BRILLIANCE CHI (01114) fell 4.3% to HK$3.78; GWMOTOR (02333) dropped 2.75% to HK$15.54; GAC GROUP (02238) declined 1.86% to HK$3.17; LI AUTO-W (02015) fell 1.18% to HK$87.9.

On the news front, the Ministry of Industry and Information Technology and two other departments previously issued guidelines clarifying technical requirements for new energy vehicle products eligible for vehicle purchase tax reductions in 2026-2027. UBS released a research report stating that while most automakers should be able to meet the new standards, the latest policy updates may appear more stringent and could negatively impact market sentiment. Although policy tailwinds from mid-2024 may shift direction by 2026, investors remain broadly optimistic about individual companies' new vehicle launches.

Additionally, Cui Dongshu, Secretary-General of the Passenger Car Association, recently stated that the association had already raised its full-year auto market forecast in August and would further adjust predictions after discussions in late October, expecting to revise upward the 2025 growth forecast. Shenwan Hongyuan recently released a research report indicating that auto subsidies are gradually coming to an end, and the new energy vehicle purchase tax exemption policy will terminate starting next year, leading to a significant increase in car purchase costs. This may trigger a wave of market rush purchases entering the fourth quarter.