China Autos Alert: Guangzhou announces “Guangzhou Trial Medium to SmallPassenger Carrying Vehicles Outstanding Management”

Among the stocks we cover Dongfeng’s Nissan, Honda and PSA PV JV’s combinedto have a 9% Guangdong province PV registration exposure in 2011 (or 2%Guangzhou city exposure assuming Guangzhou is one quarter of Guangdong’sregistration) and auto dealer China ZhengTong has two (i.e. BMW and Jaguar LandRover/Volvo) out of 59 stores in Guangzhou. We believe Guangzhou’s measure’simpact on China ZhengTong’s two stores should be relatively limited given the PVproduct mix upgrade we saw in Beijing post vehicle ownership control.