China's vehicle inventory alert index climbs MoM, but drops YoY in Apr. 2024

Beijing (Gasgoo)- In April 2024, China's Vehicle Inventory Alert Index (VIA), which reflects the inventory pressure on automobile dealers, stood at 59.4%, indicating a year-on-year decrease of 1 percentage points but a month-on-month increase of 1.1 percentage points, according to the China Automobile Dealers Association ("CADA").

The VIA remains above the 50% threshold, indicating a downturn in the automotive circulation industry.

China’s auto market in April performed worse than the previous month, affected by traditional off-season, the Qing Ming Festival, and extreme weather conditions in some regions, leading to relatively low consumer willingness to purchase cars.

On the other hand, the Auto China 2024 during the May Day holiday and the release of the "Action Plan for Promoting the Trade-in of Old for New Consumer Goods" have caused consumers to adopt a wait-and-see attitude, resulting in a delayed demand for car purchases in April.

The survey shows that nearly 70% of dealerships have introduced relevant support policies at the provincial, municipal, group, or brand level to promote the trade-in of old for new cars. However, 43% of dealers believe that the current market climate is complex, and the expected effects of policy implementation are average, said the CADA.

To meet first-quarter sales targets, dealers have absorbed some potential customers ahead of schedule, easing inventory pressure. However, dealer orders and transactions in April were somewhat affected. Due to ongoing price wars in the new energy vehicle market, some dealerships are selling vehicles at a loss, leading to cash flow shortages and declining profits.

In April 2024, the VIAs of luxury & imported brands and China’s indigenous brands stood at 63.1% and 59.1%, respectively, rising 8.7 and 6.6 percentage points from the previous month. Meanwhile, the VIA of mainstream joint-venture brands in China dipped 6.5 percentage points from March to 57.4%.