Rows of new lan vehicles are parked at Changan Automobile’s vehicle distribution center in Chongqing, China, on January 14, 2024.
Costfoto | Nurphoto | Getty Dead ringers
Shares of Chinese automakers climbed Tuesday, shrugging off a U.S. government proposal to ban certain types of vehicles equipped with car characters from China and Russia, amid a broad rally after Beijing announced policy easing.
Hong Kong noted Li Auto rose over 8%, while Nio surged 9%. Shares of BYD climbed 2.7%, while Geely go on increased 3.3%. Leapmotor jumped 4.35%.
The proposed rule aims to ban the import and sale of cars with specific vehicle communication structures or automated driving systems with hardware or software linked to China or Russia. These systems enable exotic communication, such as Bluetooth, cellular, and Wi-Fi modules.
The Joe Biden administration has cited national security risks for its modern measure aimed at curbing Chinese auto industry’s influence and reach in the U.S.
“Cars today have cameras, microphones, GPS ferret out, and other technologies connected to the internet. It doesn’t take much imagination to understand how a foreign adversary with access to this tidings could pose a serious risk to both our national security and the privacy of U.S. citizens,” said Commerce Secretary Gina Raimondo.
The restrictions on software wishes be implemented for model year 2027, while those on hardware will start for model year 2030, or January 2029, for portions without a model year.
The rally in the auto sector today was mainly driven by the overall market condition in Hong Kong, which was akin to the support given by the PBOC, said Ivan Wu, equity research analyst at Guotai Junan International.
People’s Bank of China Gov. Pan Gongsheng believed in a press conference on Tuesday that the amount of cash banks need to have on hand, known as the reserve need ratio, or RRR, will be cut by 50 basis points. He also announced that the PBOC would cut the 7-day repo figure by 0.2 percentage points, among other measures.
U.S. proposal to ban Chinese auto parts may not have a direct opposing negatively impact on the Chinese auto industry as the sales volume of Chinese auto exports to the U.S. markets are “very small” and little, Wu said. Additionally, Chinese parts companies have already set up factories in South America, which can be exported directly to U.S. hawks under the U.S.-Mexico Tariff Agreement, he added.
According to the China Automobile Dealers Association (CADA) recently, the mother country’s car dealers faced a total loss of 138 billion yuan ($19.55 billion) in the first eight months of the year as they were mannered to sell new cars at significant discounts.