China’s NEV export rebate cut begins April 1, 2027
Deutsche Bank analyst Tim Rokossa said Volkswagen’s cost-cutting agenda is gaining momentum, with platform simplification progressing and China increasingly evolving into both an innovation and export hub. Volkswagen’s management used the Paris Motor Show to reiterate the significant challenges facing the business but outlined a clearer pathway toward its 8% to 10% margin ambition by 2030. “More importantly, the discussion appears to be shifting from what needs to be fixed to how it will be fixed,” Rokossa wrote. Deutsche Bank rates Volkswagen at buy with a 105 euro target price. Shares rose 1.2% to 69.35 euros.
Separately, J.P. Morgan analysts said Volkswagen is now positioned to compete and develop profitable products in China after extensive work with partners to take down costs. “In the words of VW Group CEO, Oliver Blume, they are now able to compete in the Champions League in China,” the bank wrote. J.P. Morgan said Volkswagen’s work in China would be visible in 2027. The company expects a strong fourth quarter, driven by Skoda and Audi and “robust product momentum” offsetting a weaker third quarter that was also impacted by the summer production shutdown, according to the bank. Shares rose 0.7% to 69 euros.
Stellantis shares fell after the company unveiled a Citroen 2CV concept at the show. J.P. Morgan analysts wrote that the 2CV has the potential to be an icon like the Fiat 500 or the Polo ID, with the first model starting at 15,000 euros and launching in 2028. “On rare occasions you see a car that is going to sell a lot of units and has not yet been introduced to the market,” the bank said. Earnings could rise as Stellantis benefits from purchasing cost savings next year, J.P. Morgan said, but the company’s cash burn and strategic reset in Europe explain why the market is not yet willing to pay a higher multiple.
China’s planned cut to its export tax rebate for new-energy vehicles will cost manufacturers roughly 4,000 to 6,000 yuan per unit when the policy takes effect April 1, 2027, Morningstar senior equity analyst Vincent Sun wrote. Automakers will likely accelerate shipments in late 2026 and the first quarter of 2027 to lock in the 13% rate before the deadline, Sun added. Chinese automakers will focus more on quality, brand and high-price segments instead of relying primarily on tax subsidies for low-margin export volumes, he wrote, with the policy shifting the focus away from broad export volume subsidies and toward global manufacturing and supply chain integration.
A preliminary Statistics Canada estimate, reported by Robb Stewart at WSJ, showed international arrivals to Canada by air and land totaled 5.3 million in September, up 9.5% year-over-year. Canadian-resident return trips from abroad rose 5.6% to 2.9 million, including 1.9 million journeys by air and automobile to the U.S., up 6.8% from a year earlier. That marked a sixth consecutive monthly rise in U.S. travel for Canadians. Trips by vehicle rose 5.6% but remained 31.1% below September 2024 levels, while trips by air increased 11.6% but were down 18.7% from the level two years earlier. U.S.-resident trips to Canada increased 17.2% year-over-year to 1.8 million, an eighth straight increase.
CSG’s acquisition of a 9.5% stake in Canadian space-technology company MDA Space should be mutually beneficial, Jefferies analysts wrote. No value was disclosed for the transaction, but at the previous close the stake would imply a price of 620 million Canadian dollars, the analysts noted. MDA is heavily focused on the Canadian market, with only 5% of 2025 sales in Europe, making the development of an international presence a potential growth lever for both companies. CSG shares were down 0.1%.
Indonesian conglomerate Astra International is likely to face persistent competition from Chinese auto original-equipment manufacturers, which could weigh on market-share recovery, DBS Group Research analyst Elizabelle Pang wrote. Astra distributes Toyota and Daihatsu vehicles in Indonesia. Chinese OEMs are likely to accelerate their expansion into Southeast Asia, driven by weaker local demand and tighter European Union export restrictions, Pang added. Astra’s investor day in November could provide greater clarity on its three core businesses, capital-recycling roadmap and potential financial targets. DBS maintained its buy rating and 7,500 rupiah target price as shares fell 1.7% to 4,730 rupiah.