JPM sees global auto competition heating up as China market expands

Opmobility SE

07/06/2023 11:52

** J.P.Morgan sees increasing competition among global
carmakers as the Chinese market continues to expand rapidly
    ** "The competition in the automotive market is clearly
heating up and we think the fight is in the mass market," JPM
says, highlighting the need for consolidation in the Chinese car
market
    ** The brokerage says the Chinese market can hit 30 million
sales in the medium term, and expects around 10% of the European
market to be displaced by new brands such as BYD  002594.SZ ,
Tesla  TSLA.O  and Asian carmakers in the next three years
    ** JPM says Chinese original equipment manufacturers (OEM)
"have an edge" over European counterparts in terms of
infotainment offering
    ** It sees European OEMs and Tesla facing "intense
competition" in the Chinese market within the premium and
higher-end price segments
    ** "We believe investors will seek refuge in companies with
strong premium or luxury pricing power, automotive suppliers or
great execution/restructuring investment cases," the broker adds
    ** It stays "overweight" on Daimler Truck  DTGGe.DE ,
Mercedes Benz  MBGn.DE , Porsche  PSHG_p.DE , Renault  RENA.PA ,
Stellantis  STLAM.MI  and Volkswagen  VOWG_p.DE ; "neutral" on
BMV  BMWG.DE , Volvo Car  VOLCARb.ST  and Volvo  VOLVb.ST  
    ** From auto parts suppliers, it maintains Forvia  FRVIA.PA 
at "overweight", Continental  CONG.DE  and Plast Omnium
 PLOF.PA  at "neutral"

 (Reporting by Anna Mackenzie)
 ((Anna.mackenzie@thomsonreuters.com))