Shanghai (Gasgoo)- On March 31, the China Automobile Dealers Association ("CADA") released the latest Vehicle Inventory Alert Index (VIA), which stood at 54.6% for March 2025, reflecting a year-over-year decrease of 3.7 percentage points and a month-over-month drop of 2.3 percentage points.
While the index remains above the boom-bust threshold signaling market contraction, the overall business climate in the automotive distribution sector has shown signs of improvement.
In March, China's passenger vehicle market experienced a gradual recovery, driven by governmental stimulus package, which includes incentives for large-scale equipment renewals and consumer goods trade-ins, along with various consumption-boosting initiatives. Automakers also ramped up promotional efforts, launched new models, and leveraged spring auto shows to stimulate consumer demand. A recent trend in the market is the adoption of fixed-price sales strategies by several joint-venture brands, offering fixed pricing on select models, time-limited fixed prices, and upgrade-based fixed pricing. While this approach has helped attract customers and drive short-term sales, its long-term viability remains uncertain. Given these favorable conditions, the retail sales of China's passenger vehicles are expected to reach approximately 1.9 million units in March.
As the first quarter drew to a close, dealers faced increased inventory pressure due to rising vehicle intake targets. Although the aggressive price wars have eased, manufacturers have introduced incentives such as feature upgrades at no extra cost, extended warranties, and financial insurance benefits, providing a boost to sales. According to dealer feedback collected by the CADA, overall first-quarter sales performance was relatively strong, with 34.1% of dealers meeting their targets as planned, 20.3% achieving 90%–100% of their targets, and 22.0% reaching 80%–90%. However, since the start of the year, the time required to convert customer leads into actual purchases has significantly lengthened, with 54.1% of dealers reporting that the process now takes between two weeks and a month.
Looking at the indices by brand type, in March 2025, the VIA for luxury & imported brands reached 58.3%, which rose 2.8 percentage points from the previous month. Meanwhile, the mainstream joint-venture brands and China's self-owned brands saw their VIAs in the month drop 3.7 and 4.4 percentage points from February to 55.5% and 50.3%, respectively.
