SINOLINK SECURITIES·2025-05-07 09:25Investment Rating - The report recommends focusing on companies with a low-cost strategy and strong product creation capabilities, particularly BYD, Xiaopeng Motors, and Leap Motor, which are expected to exceed performance expectations in 2025 [6]. Core Insights - The automotive industry is characterized by a competition focused on creating blockbuster products, influenced by market competition, brand strength, and cost-performance ratio [2][3][4]. - The current market demands products with high cost-performance, as companies engage in price wars, making consumers more sensitive to pricing [4][5]. - Companies that can effectively reduce costs while maintaining product quality are more likely to succeed in the current competitive landscape [5][6]. Summary by Sections Section 1: Competition in the Automotive Industry - The automotive market is driven by the creation of blockbuster products, leading to cyclical sales fluctuations that impact stock prices [2][15]. - The competition is influenced by three main factors: market competition structure, brand strength, and cost-performance ratio [2][15]. - The industry is transitioning towards a technology-oriented model, with increasing importance placed on software and intelligent driving technologies [17]. Section 2: Product Creation Strategies - Three strategies for creating blockbuster products are identified: emerging market strategy, cost-performance strategy, and brand strength strategy [3][4]. - Companies like Li Auto focus on emerging markets, while others like Geely and Xiaopeng adopt cost-performance strategies to capture market share [3][4]. Section 3: Market Dynamics and Future Trends - The report emphasizes that the market is currently in a price war, with companies needing to enhance their product creation capabilities under cost-performance pressures [4][5]. - Intelligent driving is seen as an inevitable trend, with expectations for consumer recognition to increase in the future [4]. Section 4: Recommended Companies - Companies such as BYD, Geely, Xiaopeng, and Leap Motor are highlighted for their strong product creation capabilities and low-cost strategies, making them attractive investment opportunities [6][4]. - BYD is noted for its technological advancements and cost advantages, while Geely is recognized for its recent successful product launches [6][4].