China’s vehicle inventory alert index rose in Jul, car dealers’ operations recovered slower than expected – industry association
DATA
China’s vehicle inventory alert index rose in Jul, car dealers’ operations recovered slower than expected – industry association
DATA

China’s vehicle inventory alert index rose in Jul, car dealers’ operations recovered slower than expected – industry association

 

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China’s vehicle inventory alert index (VIA), which reflects the inventory pressure on automobile dealers, reached 57.8% in July, rising by 3.8 percentage points from the previous month, up 3.4 percentage points from a year earlier, according to the China Automobile Dealers Association (CADA).

A higher reading indicates weaker market demand, higher inventory pressure and greater risks. 

July is a traditional low season for China’s auto market, with market demand easing and the pace of carmakers and car dealers’s production and sales slowing, said the association.

The strong travel demand in the summer and the high-temperature and rainy weather also had negative impact on customer traffic and car sales, it said.

The government introduced introduced new measures to boost auto consumption in the second half of July and some local governments launched a second round of car purchase subsidies, which to some extent boosted the auto market, it said.

The recovery of car dealers’ operations are slower than expected and their car inventories at the end of July was higher than a month earlier and prices have been trending lower, leaving car dealers facing weakening profitability, slow cash collection and tight circulating funds, etc, it said.