Shanghai (Gasgoo)- On September 30, 2024, the China Automobile Dealers Association ("CADA") released the latest "Vehicle Inventory Alert Index" (VIA). The report shows that the index for September stood at 54.0%, marking a year-on-year decrease of 3.8 percentage points and a month-on-month drop of 2.2 percentage points.
Despite the decline, the index remains above the boom-bust threshold, indicating that the automotive circulation sector continues to see sustained improvement.
In China, September is traditionally a high season for the automotive market, with the release of new models driving sales, the launch of autumn auto shows, and the surge in road trips during the National Day holiday. These factors have bolstered vehicle sales. Additionally, policies aimed at scrapping old vehicles and encouraging trade-ins have gradually revitalized the market, with significant impact. According to the survey by the CADA, 35.1% of dealers report seeing notable results from these policies, a substantial increase from previous months. However, 55.2% of dealers still believe the impact remains moderate. It is projected that total retail sales of passenger vehicles in September will reach around 2.1 million units in China, representing both year-on-year and month-on-month growth, said the association.
The CADA commented that the intense competition in the market has kept vehicle prices low, putting pressure on dealers’ profit margins. Furthermore, some financial institutions have raised the risk level for dealers, leading to loan reductions and even suspensions, which has somewhat restricted the full release of demand during the "Golden September, Silver October" period. The survey also indicates that 60.4% of dealer groups reported sales below expectations for this peak season, while 36.4% stated sales were roughly in line with expectations.
Looking at the indices by brand type, in September, the VIAs for luxury & imported brands, joint-venture brands, and China's self-owned brands saw month-on-month decreases of 1.7, 2.9, and 1.7 percentage points, reaching 57.6%, 53.5% and 50.1%, respectively.
The association added that looking ahead to October, the car scrappage and trade-in policies are expected to continue their steady progress, along with the boost from the Golden Week auto shows, self-driving tour trends, and dealers' year-end push. Market demand is expected to remain robust, with October's sales forecasted to be largely on par with those of September.
