Core Viewpoint - The automotive sector is experiencing a decline in stock prices, with significant drops in shares of major companies like Li Auto, Xpeng Motors, GAC Group, and Great Wall Motors, amidst mixed retail sales data for July 2025 [1] Industry Summary - Retail sales of passenger vehicles in China for July 1-20, 2025, reached approximately 978,000 units, marking a year-on-year increase of 11% but a month-on-month decline of 12% [1] - The total retail market for narrow passenger vehicles in July 2025 is projected to be around 1.85 million units, reflecting a year-on-year growth of 7.6% and a month-on-month decrease of 11.2% [1] - New energy vehicle retail sales are expected to reach about 1.01 million units, with a penetration rate of approximately 54.6% [1] Company Summary - Longjiang Securities indicates that the financial health of the automotive industry is currently strong compared to both domestic and international competitors, but warns of potential pressure on profitability due to intensified competition and price declines [1] - The industry is advocating against excessive competition to maintain a healthy competitive environment, which may support the sustainable development of the automotive sector [1] - The company sees potential in strong intelligent driving vehicles during the new cycle of intelligent driving upgrades, as well as opportunities for leading manufacturers that have been negatively impacted by joint venture price cuts [1] - Despite a slowdown in overall export growth, there is a structural high growth in new energy vehicle exports, which presents opportunities in the global incremental market [1]