BOCOM INTL issued a research report maintaining a leading rating on China's automotive industry. The adjustment of NEV purchase tax exemption policy in 2026 is expected to stimulate concentrated car purchases before 2025 year-end. With automakers pushing for year-end sales volume and pre-Spring Festival inventory buildup, the bank anticipates sustained strong passenger vehicle sales momentum. However, following Q4's concentrated sales surge, Q1 2026 may see a return to seasonal weakness. Investors are advised to capitalize on structural opportunities while staying cautious about short-term fluctuations.

The report highlights XPENG-W (09868) with its new P7/extended-range models launching sequentially and overseas localized production gradually materializing, which should boost sales volume and gross margins. GEELY AUTO (00175) is noted for its internal resource integration post-ZEEKR privatization, while SERES' AITO series continues expanding into premium markets to enhance profitability.

October 2025 saw a slight YoY and MoM decline in retail passenger vehicle sales at 2.24 million units (+0.8% YoY, -0.1% MoM), attributed to tightened trade-in subsidies in some regions and high base effects. Cumulative Jan-Oct retail sales reached 19.25 million units (+7.9% YoY).