The inventory early warning index of Chinese auto dealers in June was 50.4%, down 8.8 percentage points from a year earlier.-Shanghai Metals Market

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The inventory early warning index of Chinese auto dealers in June was 50.4%, down 8.8 percentage points from a year earlier.

Translation 04:44:35PM Jul 02, 2019 Source:Sohu automobile
The content below was translated by Tencent automatically for reference.

SMM News: on July 1, the China Automobile Circulation Association held a monthly situation analysis meeting in Beijing, at which the latest issue of "China Automobile Dealers inventory early warning Index Survey" VIA (Vehicle Inventory Alert Index) report was released.

The data show that in June 2019, the auto dealer inventory early warning index was 50.4%, down 3.6 percentage points from the previous month and 8.8 percentage points from the same period last year, and the inventory early warning index was above the warning line.

Some regions six countries and five switching, five models to step up promotion efforts, customers hold the mentality of buying cars at the bottom of this month in June, resulting in a brief rebound in sales; in order to clear the inventory of five models, dealers have a phenomenon of inverted price and more loss of profits; in June, dealers who do not implement the six national standards in advance are also carrying out impulse promotions in order to complete the semi-annual assessment.

From the sub-index point of view: the survey shows that the market demand index, the average daily sales index rose, inventory index, employee index, operating condition index decreased month-on-month.

Judging from the regional index, the national total index in June was 50.4%, the north index was 53.9%, the eastern index was 44.5%, the southern index was 54.0%, and the western index was 51.8%. Because the eastern provinces are the provinces that implement the six national standards ahead of time, dealers step up promotion efforts and clear the inventory of five vehicles, resulting in a lower inventory early warning index.

The inventory early warning index for the areas with early implementation of the sixth national standard is 45.7%, which is significantly lower than that in May, below the warning line, and the inventory early warning index for the areas without the implementation of the sixth standard in advance is 59.5%, above the warning line.

From the sub-brand type index: June 2019 import-luxury brand index, joint venture brand index, independent brand index decreased compared with the previous month.

 

The survey shows that in June, some areas due to the national five clear treasury, customers overdraft more, and because the national five models delisted, next month in the sale of models decreased, July sales are not optimistic; and in July into the summer, the temperature increased, the number of customers to stores decreased, will also affect sales.

The China Automobile Circulation Association suggests that dealers should rationally estimate the actual market demand and reasonably control the inventory level according to the actual situation, so as to prevent excessive inventory pressure and lead to operational risks.

Attached: survey description and regional division standard of inventory early warning index of automobile dealers

1. Description of inventory early warning Index of Automobile Dealers

The China Automobile Circulation Association put forward the construction of "inventory early warning system" as early as March 2010, and began to carry out regular inventory investigation of cars and dealers since July 2010. In 2012, in order to reflect the trends of the industry in a more forward-looking manner, the Association constructed an early warning index of automobile dealer inventory after more than half a year of research.

The purpose of the automobile dealer inventory early warning index survey: first, grasp the pulse of the market. Through the investigation of the inventory status of various brands of automobile dealers in the country, timely grasp the overall situation of the industry, predict the future market trend; second, assist regulation and control decision-making. Through the understanding of dealer inventory changes, for the relevant departments to formulate regulatory measures to provide accurate information. Third, monitor operational risks. Timely reflect the production and marketing fluctuations of the automobile market, for manufacturers to arrange production plans reasonably, for dealers to formulate marketing strategies and control business risks to provide reference.

According to the principle of PMI, the inventory early warning index adopts the method of extended index, with 50% as the line of prosperity and decline. Less than 50% are in a reasonable range. The higher the inventory early warning index, the lower the market demand, the greater the inventory pressure, the greater the operating pressure and risk.

In order to enhance the forward-looking and forecasting function of the inventory early warning index, drawing lessons from the construction ideas and methods of the PMI index, the inventory early warning index selects the indexes closely related to the change of automobile inventory to form a comprehensive index. The related indicators mainly include: total demand of automobile market, 4S store passenger volume, transaction rate, price change, sales volume change, inventory change, number of employees change, liquidity and operating status.

This month's dealer inventory survey is mainly aimed at the top 100 dealers in China's automobile circulation industry in 2016. It covers more than 1000 4S stores in most provinces of the country, and has a wide range of brand coverage, covering 55 imported, joint venture and independent car brands sold in the domestic market.

2. Regional division standard

North District includes provinces and regions: Beijing, Hebei, Henan, Heilongjiang, Jilin, Liaoning, Inner Mongolia, Shanxi

The southern region contains provinces and regions: Fujian, Guangdong, Guangxi, Hainan, Hubei, Hunan and Jiangxi

The Eastern District includes provinces and regions: Anhui, Jiangsu, Shandong, Shanghai, Tianjin and Zhejiang

The west contains provinces and regions: Gansu, Guizhou, Shaanxi, Sichuan, Xinjiang, Yunnan, Chongqing, Ningxia, Qinghai, Tibet

Key Words:  Cars  dealers  inventory  car markets 

The inventory early warning index of Chinese auto dealers in June was 50.4%, down 8.8 percentage points from a year earlier.

Translation 04:44:35PM Jul 02, 2019 Source:Sohu automobile
The content below was translated by Tencent automatically for reference.

SMM News: on July 1, the China Automobile Circulation Association held a monthly situation analysis meeting in Beijing, at which the latest issue of "China Automobile Dealers inventory early warning Index Survey" VIA (Vehicle Inventory Alert Index) report was released.

The data show that in June 2019, the auto dealer inventory early warning index was 50.4%, down 3.6 percentage points from the previous month and 8.8 percentage points from the same period last year, and the inventory early warning index was above the warning line.

Some regions six countries and five switching, five models to step up promotion efforts, customers hold the mentality of buying cars at the bottom of this month in June, resulting in a brief rebound in sales; in order to clear the inventory of five models, dealers have a phenomenon of inverted price and more loss of profits; in June, dealers who do not implement the six national standards in advance are also carrying out impulse promotions in order to complete the semi-annual assessment.

From the sub-index point of view: the survey shows that the market demand index, the average daily sales index rose, inventory index, employee index, operating condition index decreased month-on-month.

Judging from the regional index, the national total index in June was 50.4%, the north index was 53.9%, the eastern index was 44.5%, the southern index was 54.0%, and the western index was 51.8%. Because the eastern provinces are the provinces that implement the six national standards ahead of time, dealers step up promotion efforts and clear the inventory of five vehicles, resulting in a lower inventory early warning index.

The inventory early warning index for the areas with early implementation of the sixth national standard is 45.7%, which is significantly lower than that in May, below the warning line, and the inventory early warning index for the areas without the implementation of the sixth standard in advance is 59.5%, above the warning line.

From the sub-brand type index: June 2019 import-luxury brand index, joint venture brand index, independent brand index decreased compared with the previous month.

 

The survey shows that in June, some areas due to the national five clear treasury, customers overdraft more, and because the national five models delisted, next month in the sale of models decreased, July sales are not optimistic; and in July into the summer, the temperature increased, the number of customers to stores decreased, will also affect sales.

The China Automobile Circulation Association suggests that dealers should rationally estimate the actual market demand and reasonably control the inventory level according to the actual situation, so as to prevent excessive inventory pressure and lead to operational risks.

Attached: survey description and regional division standard of inventory early warning index of automobile dealers

1. Description of inventory early warning Index of Automobile Dealers

The China Automobile Circulation Association put forward the construction of "inventory early warning system" as early as March 2010, and began to carry out regular inventory investigation of cars and dealers since July 2010. In 2012, in order to reflect the trends of the industry in a more forward-looking manner, the Association constructed an early warning index of automobile dealer inventory after more than half a year of research.

The purpose of the automobile dealer inventory early warning index survey: first, grasp the pulse of the market. Through the investigation of the inventory status of various brands of automobile dealers in the country, timely grasp the overall situation of the industry, predict the future market trend; second, assist regulation and control decision-making. Through the understanding of dealer inventory changes, for the relevant departments to formulate regulatory measures to provide accurate information. Third, monitor operational risks. Timely reflect the production and marketing fluctuations of the automobile market, for manufacturers to arrange production plans reasonably, for dealers to formulate marketing strategies and control business risks to provide reference.

According to the principle of PMI, the inventory early warning index adopts the method of extended index, with 50% as the line of prosperity and decline. Less than 50% are in a reasonable range. The higher the inventory early warning index, the lower the market demand, the greater the inventory pressure, the greater the operating pressure and risk.

In order to enhance the forward-looking and forecasting function of the inventory early warning index, drawing lessons from the construction ideas and methods of the PMI index, the inventory early warning index selects the indexes closely related to the change of automobile inventory to form a comprehensive index. The related indicators mainly include: total demand of automobile market, 4S store passenger volume, transaction rate, price change, sales volume change, inventory change, number of employees change, liquidity and operating status.

This month's dealer inventory survey is mainly aimed at the top 100 dealers in China's automobile circulation industry in 2016. It covers more than 1000 4S stores in most provinces of the country, and has a wide range of brand coverage, covering 55 imported, joint venture and independent car brands sold in the domestic market.

2. Regional division standard

North District includes provinces and regions: Beijing, Hebei, Henan, Heilongjiang, Jilin, Liaoning, Inner Mongolia, Shanxi

The southern region contains provinces and regions: Fujian, Guangdong, Guangxi, Hainan, Hubei, Hunan and Jiangxi

The Eastern District includes provinces and regions: Anhui, Jiangsu, Shandong, Shanghai, Tianjin and Zhejiang

The west contains provinces and regions: Gansu, Guizhou, Shaanxi, Sichuan, Xinjiang, Yunnan, Chongqing, Ningxia, Qinghai, Tibet

Key Words:  Cars  dealers  inventory  car markets