China’s vehicle inventory alert index in Aug. 2024 drops both YoY, MoM

Shanghai (Gasgoo)- The China Automobile Dealers Association ("CADA") recently released the latest "China Automobile Dealers Inventory Alert Index" (VIA), showing that in August 2024, the VIA for Chinese automobile dealers reached 56.2%, representing an year-on-year decrease of 0.7 percentage points and a month-on-month decline of 3.2 percentage points.

Despite the improvement, the index remains above the boom-bust threshold that indicates a healthy market, signaling ongoing concerns in the automotive circulation industry.

The enhancement in industry sentiment can be partly attributed to the strengthened vehicle trade-in policies, which have significantly driven sales. Since the beginning of August, the average daily number of applications for scrappage and renewal subsidies has exceeded 10,000, contributing to a month-over-month increase in terminal sales. Additionally, with the back-to-school season approaching, there has been a sustained rise in family car purchases.

However, several factors have tempered market demand. High temperatures across many regions and the traditional cultural observance of the Zhongyuan Festival (the day for the deceased in Chinese tradition) have had a cooling effect on the market. The CADA added that adjustments in retail sales discounts have led to a cautious consumer outlook, with many potential buyers adopting a wait-and-see approach.

Looking at the indices by brand type, in August, the VIA for luxury & imported brands reached 59.3%, growing 5.7 percentage points over the previous month. Meanwhile, mainstream joint-venture brands, and China's self-owned brands recorded readings of 56.4% and 51.8%, down by 3.8 and 10 percentage points, respectively.