Investment Rating - The report maintains a "Positive" investment rating for the automotive industry [5]. Core Insights - The automotive industry is undergoing a valuation reconstruction driven by the rise of smart and connected vehicles, which is expected to lead to a "Davis Double" effect in 2025 [3][4]. - The market is shifting from price competition to value competition, with significant growth potential in the smart connected vehicle supply chain [4][19]. Summary by Sections 1. Domestic Automotive Market Analysis - The automotive industry in China has entered the smart connected vehicle era, supported by comprehensive policies [11][15]. - In 2023, China's automotive production reached over 30 million units, with a strong performance from domestic brands [12][19]. - By 2025, the penetration rate of new energy vehicles (NEVs) is expected to exceed 50%, driven by favorable policies and market dynamics [20][21]. 2. Smart Connected Vehicle Supply Chain Development - The smart connected vehicle supply chain is anticipated to experience rapid growth, with the overall market value expected to exceed one trillion [8][19]. - The integration of "vehicle-road-cloud" systems is becoming a new trend, enhancing the smart transportation ecosystem [8][19]. - The penetration rate of advanced driving assistance systems (L2 and above) is projected to increase significantly, benefiting from technological advancements and cost reductions [4][19]. 3. Investment Recommendations - Focus on leading companies and high-growth segments within the supply chain, particularly those with core technologies and significant market shares [4][19]. - In the vehicle segment, domestic brands with strong technology and market presence are expected to maintain their competitive edge [4][19]. - In the smart component segment, companies specializing in intelligent chassis components are likely to receive more orders as the industry matures [4][19].