China’s vehicle inventory alert index in Nov. 2024 drops YoY to 51.8%

Shanghai (Gasgoo)- The China Automobile Dealers Association ("CADA") recently released the latest "China Automobile Dealers Inventory Alert Index" (VIA), showing that in November 2024, the VIA for Chinese automobile dealers reached 51.8%, representing an year-on-year decrease of 8.6 percentage points and a month-on-month increase of 1.3 percentage points.

The index, hovering near the boom-bust threshold (50%), indicates continued improvement in the automotive distribution sector.

The CADA commented that the market's momentum was bolstered by supportive national policies and local subsidy programs, particularly those targeting vehicle trade-ins and replacement. Additionally, automakers and dealers intensified efforts to meet annual sales targets, leveraging major events such as "Double 11" online shopping promotions and the successful Auto Guangzhou 2024 to inject vitality into November's auto market, driving sales higher.

Despite the positive trends, the market fell short of many dealers' expectations. According to the survey by the CADA, 58.2% of dealers reported that market performance did not meet their projections, while 41% felt the results aligned with expectations. To meet year-end targets and secure annual rebates, coupled with anticipated demand from the upcoming Chinese New Year shopping season, dealers have ramped up inventory replenishment efforts to accelerate stock turnover and recover cash flow.

However, the surge in sales has yet to translate into a significant improvement in dealer profitability. Many still face severe liquidity challenges, underscoring the need for ongoing structural adjustments and support within the industry.

Looking at the indices by brand type, in November, the VIA for luxury & imported brands and China’s self-owned brands reached 51% and 51.6%, falling 3.1 and 0.6 percentage points over the previous month. Meanwhile, mainstream joint-venture brands recorded readings of 52.3%, up by 4.4 percentage points, respectively.