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China’s Oct. Vehicle Inventory Alert Index rises month on month

Monika From Gasgoo| November 04 , 2019

Shanghai (Gasgoo)- For the month of October, China's Vehicle Inventory Alert Index (VIA), which reflects the inventory pressure of automobile dealers, was up by 3.8 percentage points over a month ago, said the China Automobile Dealers Association (CADA).

The VIA stood at 62.4% last month, dropping 4.5 percentage points from the previous year, while still exceeding an official warning threshold.

China VIA October, China auto dealer inventory pressure

The higher the index, the heavier inventory pressure should auto dealers face. According to the association, fewer visitors came to 4S shops in October because people swarmed to travel during the National Day Holiday. Due to the busy harvest season, numbers of car buyers in Northern China's rural areas were somewhat decreased. Besides, car purchasing demands were to some extent curbed in some rural regions where crops failed.

Moreover, part of consumers held a wait-and-see attitude as automakers and dealers will offer greater discounts to sell more vehicles at the auto shows to kick off November. Given the aforesaid reasons, the auto dealers faced heavier pressure in October and the competition had been further intensified.

The CADA said the VIA of imported & premium auto brands and joint-venture brands were increased over the premium month.

However, Chinese indigenous brands posted lower VIA from a month earlier since the sample capacity of stronger brands like Great Wall Motor, Geely and SAIC Motor PV was relatively high, while marginalized brands featured smaller sample size, said Lang Xuehong, deputy secretary-general of the CADA.

To cope with the continuous high inventory pressure, auto dealers should rationally estimate the market demands and control their inventories based on the actual situation, so as to prevent themselves from operational risks led by excessive inventory pressure, said the CADA.

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