28/11/2006 04:07 London Time | story 0260
BEIJING (XFN-ASIA) - China''s auto market is expected to see more competition next year, with global and domestic companies aggressively launching new models, Morgan Stanley said.
In a research note, Morgan Stanley said it expects local brands to gain market share over the next 24 months, while also depressing prices as they launch new, low-cost models.
Of the international car makers, Toyota and Nissan will continue to outperform and take more market share with new capacity and models, the brokerage said.
"Japanese automakers, led by Toyota and Nissan, will maintain strong momentum in 2007," Morgan Stanley said.
Toyota will enhance its position in the midmarket segment with the launch of its latest version of the Corolla, while Nissan has just introduced its Livina Geniss multi-purpose vehicle, and will roll out another one or two models next year.
Volkswagen is set to recover further in 2007 with the launch of two new models - the Magotan and Skoda''s Octavia, Morgan Stanley said.
Morgan Stanley said Great Wall Motor is well-positioned to grow with its new sedans, which it said are competitively priced and stylish.
The brokerage has an "overweight-v" rating and 7.61 hkd price target on Great Wall.
Morgan Stanley added that it remains cautious on Denway Motors because of a lack of new products in the pipeline before 2008.
The brokerage has an "underweight-v" rating and 3.12 hkd price target on Denway.
Great Wall''s shares closed the morning down 0.67 pct at 7.46 hkd, while Denway''s were down 1.95 pct at 3.02 hkd.
(1 usd = 7.8 hkd)
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