Group 1 - The investment rating for the automotive industry is positive, with expectations for steady demand growth driven by the implementation of the "Two New" policy in 2026 [1][12][14] - The core viewpoint emphasizes that the subsidy policy has shifted from fixed amounts to a percentage of the vehicle price, which is expected to benefit high-end vehicles while putting pressure on low-priced cars [1][14] - The report anticipates a marginal recovery in sales growth in Q1 2026, with an upward revision of the annual domestic sales growth forecast to -2% [1][14][16] Group 2 - The report highlights opportunities in themes such as smart technology and overseas expansion, with passenger car exports maintaining a growth rate of over 20% year-on-year [2][17] - Key companies to watch include BYD, Geely, and Li Auto in the automotive sector, and Horizon Robotics and Top Group in the smart technology and robotics sectors [2][22] - The report notes that the export volume of passenger cars is expected to maintain double-digit growth in 2026, driven by recovering demand in markets like Russia and the increasing penetration of fuel and new energy vehicles [2][17] Group 3 - The automotive market saw a wholesale sales volume of 1.457 million units in the last week of December 2025, with a year-on-year increase of 5%, while new energy vehicles accounted for 772,000 units, up 22% year-on-year [4][31] - In December 2025, the total wholesale sales volume was 2.759 million units, down 10% year-on-year, with new energy vehicles at 1.554 million units, showing a 3% increase [4][31] - The retail sales data for December 2025 indicated a total of 2.296 million units sold, down 13% year-on-year, while new energy vehicles saw a 7% increase in retail sales [4][31][46]