China's vehicle inventory alert index in Dec. 2024 climbs MoM, but dips YoY

Shanghai (Gasgoo)- China's vehicle inventory alert index (VIA), which reflects the inventory pressure on automobile dealers, climbed 6.8 percentage points month on month in January 2024, according to the China Automobile Dealers Association ("CADA").

The VIA stood at 59.9% in the first month of 2024, dipping 1.9 percentage points from the previous year.

As dealers raced to meet year-end sales targets in December, some demand was overdrawn beforehand, but the influx of consumers heading hometown and pre-holiday car purchases continued to provide a stabilizing effect on overall sales, said the CADA. Though various regions initiated new rounds of local car purchase subsidy policies, the overall discount intensity at the retail level tightened, impacting transaction volumes. To kickstart 2024 on a positive note, some automakers introduced official discounts, favoring a growth in terminal sales for January.

Overall, it is estimated that passenger car retail sales in January this year will hover around 2.2 million units. However, due to a lower baseline in the same period last year, the year-on-year growth is significant but experiences a slight dip compared to the previous month.

As the old policies stimulating consumption expired last year but new subsidy policies are yet to be fully issued, consumers are exhibiting a cautious stance. The January auto sales results fell short of expectations, intensifying the sales pressure on dealers. In the quest for a leaner start to the year and to address the inventory challenge, dealers exhibit a diminished enthusiasm for replenishing stock. 

In January 2024, the VIAs of luxury & imported brands, mainstream joint-venture brands, and China’s domestic brands reached 55.5%, 67.3%, and 56.9%, rising 2.5, 12.9, and 3.5 percentage points from the previous month, respectively.