0508 GMT - China's auto sector profitability remains under pressure in the near term, but there could be some recovery next year, Morningstar analyst Vincent Sun writes in a note. Larger scale of sales and lower battery costs could lead hybrid and electric-vehicles manufacturers' profitability to improve over 2025-2028, Sun says. Vehicle exports have risen 26% so far this year, which could help relieve competition pressure in the domestic market. The government has also implemented strict controls on new capacity approval to curb industry capacity growth, Sun adds. Morningstar expects consolidation to continue and benefit leading auto players. Among the Chinese automakers, Morningstar prefers BYD and Geely for their strong sales momentum and margins. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
(END) Dow Jones Newswires
December 02, 2024 00:08 ET (05:08 GMT)
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