China's vehicle inventory alert index in Jan. 2025 grows 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 January 2025, the VIA for Chinese automobile dealers reached 62.3%, representing a year-on-year growth of 2.4 percentage points and a month-on-month jump of 12.1 percentage points.

The index still remains above the boom-bust threshold, signaling ongoing concerns in the automotive circulation sector.

The automobile market experienced a seasonal slowdown in January. The CADA noted that the pre-Chinese New Year travel rush and the early release of demand in December 2024 led to reduced foot traffic and lower sales at dealerships. Additionally, the joint release of the policy by China's National Development and Reform Commission and the Ministry of Finance on expanded equipment upgrades and old-for-new vehicle replacement (called the"Two New" policy for short) caused some consumers to delay purchase decisions, leading to subdued market activity in the first half of the month.

However, the situation improved in the latter half of January as provinces such as Guangdong, Anhui, Sichuan, Jiangxi, and Hainan introduced specific vehicle replacement policies, spurring market recovery.

The CADA added that, despite dealers adjusting their inventory strategies ahead of the holiday season, weak overall sales in January led to increased inventory pressure. With new car sales still yielding widespread losses, cash flow challenges among dealerships remain unresolved.

Looking at the indices by brand type, in January 2025, the VIAs for luxury & imported brands, joint-venture brands, and China's self-owned brands saw month-on-month increases of 13.2, 11.4, and 9.3 percentage points, reaching 58.6%, 64.4% and 62.9%, respectively.