China Automobile Dealers Association Reports Decrease in Vehicle Inventory Alert Index for September 2024
The China Automobile Dealers Association (“CADA”) recently released their latest “Vehicle Inventory Alert Index” (VIA) for September 2024. The report indicates that the index for September was at 54%, showing a year-on-year decrease of 3.8 percentage points and a month-on-month drop of 2.2 percentage points.
Despite the decrease, the index remains above the boom-bust threshold, suggesting that the automotive circulation sector is still experiencing sustained improvement.
In September, the automotive market in China typically experiences a high season due to the release of new models, autumn auto shows, and increased road trips during the National Day holiday. These factors contribute to a boost in vehicle sales. Additionally, policies aimed at scrapping old vehicles and promoting trade-ins have started to revitalize the market, with a significant impact.
The CADA survey shows that 35.1% of dealers have seen positive results from these policies, a notable increase from previous months. However, 55.2% of dealers believe the impact is still moderate. It is projected that total retail sales of passenger vehicles in China will reach around 2.1 million units in September, showing both year-on-year and month-on-month growth.
Despite the positive outlook, intense market competition has kept vehicle prices low, putting pressure on dealers’ profit margins. Some financial institutions have also raised the risk level for dealers, resulting in loan reductions and suspensions, which have somewhat constrained the full release of demand during the “Golden September, Silver October” period.
Looking ahead to October, the CADA expects the car scrappage and trade-in policies to continue progressing steadily. The boost from Golden Week auto shows, self-driving tour trends, and dealers’ year-end push are also anticipated to contribute to robust market demand. Sales in October are forecasted to be on par with those of September.
