Car stocks tumbled yesterday following Guangzhou's weekend decision to halve the annual cap on new car registrations.
Mainland car stocks also carried on their slide from Monday, when the Hong Kong market was closed for a public holiday.
Guangzhou Automobile, which is expected to be hit the hardest by the registration cap, saw its shares fall 4 per cent to HK$6.18 while Hebei-based Great Wall Motors dropped 2.47 per cent to HK$15. Beijing is a major market for Great Wall, has had a similar cap in place for over a year.
Dongfeng Motor slid 4.4 per cent to HK$11.38 and Geely Automobile shares shed 2.96 per cent to close at HK$2.62.
Car dealers also took a hit. Zhongsheng Group, the mainland's biggest dealer, dropped 2.6 per cent to HK$9.11.
But Baoxin Auto, a major player in the eastern region and untouched by the cap, rose 2 per cent to HK$4.5.