Morgan Stanley published a research report saying that the Sino-European negotiations have transformed the tariff tension in the automobile industry into controlled trade, which is beneficial to large-scale Chinese automobile companies. Meanwhile, China is strengthening guidelines for exporters, including requiring car companies to authorize exports within 180 days of registration, curbing disorderly low price competition, and reducing VAT export rebates by 4 percentage points to 9%. This move will further squeeze smaller and grey channel exporters. The bank believes that profit margin differentiation in the industry will increase, which is beneficial to companies with a better layout. It is optimistic about BYD, Geely and SAIC Motor Group.

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