Investment Rating - The report maintains a positive investment rating for the automotive and automotive parts industry, highlighting potential growth opportunities in the sector [5]. Core Viewpoints - The Ministry of Industry and Information Technology's advocacy for reducing internal competition is expected to improve the fundamentals of the passenger car market. Key measures include shortening payment terms for suppliers, controlling pricing to prevent below-cost sales, and enhancing product quality checks [2][10]. - Passenger car sales for the first week of July 2025 reached 405,000 units, representing a year-on-year increase of 18.7% but a month-on-month decrease of 29.9%. New energy vehicle sales also showed a positive trend, with a year-on-year increase of 25.6% [1][10]. - The report suggests a focus on core companies such as Geely, BYD, Li Auto, and Xpeng, as well as Xiaomi Group and several automotive parts suppliers, indicating a shift towards value-based competition rather than price wars [2][4][10]. Summary by Sections 1. Weekly Insights - The report emphasizes the positive impact of the Ministry's policies on the passenger car market, which is expected to alleviate cash flow pressures in the supply chain and enhance industry collaboration [2][10]. - The anticipated launch of new models is expected to further improve market conditions, with key models including Xiaomi YU7, Li Auto i8, and others [2][10]. 2. Passenger Cars - The report highlights the ongoing "replace old with new" policy, which is expected to stimulate demand for passenger vehicles. The subsidy for scrapping old vehicles has been expanded to include those meeting the National IV emission standards [12][40]. - Recommended companies in the passenger car segment include Geely, BYD, Li Auto, Xiaomi Group, and Xpeng, focusing on those with strong autonomous and global expansion capabilities [4][13]. 3. Automotive Parts - The report notes that the automotive parts sector is positioned for growth, particularly with the increasing globalization of supply chains. The domestic market share of independent brands is expected to rise above 70% by 2025 [14][15]. - Recommended companies in the automotive parts sector include suppliers focused on intelligent driving and smart cockpit technologies, as well as those involved in the new energy vehicle supply chain [4][15]. 4. Robotics - The acquisition of a majority stake in a materials company by a robotics firm is expected to catalyze interest in the robotics sector. Upcoming events, such as Tesla's earnings call and the World Artificial Intelligence Conference, are anticipated to further boost the sector's visibility [3][11]. - The report emphasizes the importance of tracking Tesla's production progress and highlights potential opportunities in hardware segments related to robotics [11][17]. 5. Motorcycles - The motorcycle market is experiencing growth, particularly in the mid-to-large displacement segment, with significant increases in both domestic and export sales [19][20]. - Recommended companies in the motorcycle sector include Chunfeng Power and Longxin General, which are well-positioned to benefit from the expanding market [20][21]. 6. Heavy Trucks - The heavy truck market is expected to recover due to expanded subsidies for replacing old vehicles, which will stimulate demand for new purchases [22][23]. - Recommended companies in the heavy truck sector include China National Heavy Duty Truck Group and Weichai Power, which are well-positioned to benefit from the policy changes [23]. 7. Tires - The tire industry is seeing a positive outlook due to strong demand and the ongoing globalization of production capabilities. The report highlights the importance of innovation and product diversification in maintaining competitive advantages [26][24]. - Recommended companies in the tire sector include Sailun Tire and high-growth firms like Senkiren, which are expected to benefit from the industry's expansion [26].