April Dealer Inventory Coefficient Rises to 1.89, Channels Under Pressure as Market Shows "Mixed Signals"

Gasgoo Munich-On May 12, the latest data from the China Automobile Dealers Association (CADA) revealed that the comprehensive inventory coefficient for auto dealers stood at 1.89 in April 2026. This marks a 7.4% increase from March and a sharp 34% surge year-on-year, once again crossing the 1.5 warning line.

Image Source: China Automobile Dealers Association (same below)

On one side, a flood of new cars around the Auto China 2026 whipped up media buzz; on the other, terminal sales ground to a halt. This contrast—frenzy on stage, silence in the showroom—is the true backdrop of April's market. Behind the figure 1.89 lies mounting operational pressure and capital risk for dealers.

Total Volume Perspective: How Demand Overdraft and Wait-and-See Sentiment Drove Inventory Levels Higher

Why the sudden chill in April? According to the CADA's analysis, the market was squeezed by two primary factors.

First is "demand overdraft." At the end of March, automakers adopted aggressive push strategies to meet quarterly targets, effectively pulling sales forward from early April. The subsequent Qingming holiday then siphoned off showroom traffic, causing the pace of terminal deals to slow noticeably in early April.

Second is "delayed hesitation." The Beijing International Auto Show, held in late April, acted as a double-edged sword. While a wave of major launches grabbed headlines, many buyers held back—waiting for show-specific discounts or a closer look at new models—delaying their plans until the May Day holiday. That wait-and-see mindset meant order conversions in late April fell short of expectations.

The mismatch between supply and demand drove month-end inventory higher.

By the numbers, CADA logged passenger car retail sales at about 1.384 million units in April. That puts total dealer inventory at roughly 2.6 million units by month's end.

Dealer inventory tells a story of "passive accumulation" mixed with "active preparation." Sluggish sales forced stock to pile up passively. Yet, to prep for May Day promotions and stock display and test-drive vehicles for fresh arrivals, dealers had to strategically replenish their lots.

Automakers are feeling the squeeze too. Some have started throttling production and supply to ease the burden on dealers. But with the coefficient at 1.89, the pressure on distribution channels remains high—and shows no real sign of easing.

Brand Divergence: JVs Lead Inventory Charts, Domestic Expansion Hides Risks

Viewed by brand attribute, inventory pressure showed a uniform upward trend in April, but the pain points differ.

Joint ventures remain the hardest hit. Their inventory coefficient hit 2.24—a modest 1.4% monthly rise, but firmly above the 2.0 danger zone. It reflects a transition trap: their internal combustion engine base is being eaten away while EVs haven't picked up enough slack. With price wars dulling the appeal of volume models, inventory turnover has slowed significantly compared to previous years.

Beneath the luxury sector's resilient surface, pressure is building. The coefficient for high-end and imported brands climbed to 1.99, up 4.2% from March—just a hair away from the psychological 2.0 mark. While legacy players still command a premium, fierce attacks from high-end new forces have made price cuts the norm. That means inventory and profit pressures for dealers are anything but trivial.

Domestic brands fared better, with a coefficient of 1.69. While that's the steepest monthly jump (+11.9%), it's still the lowest absolute figure among the three groups. Strong EV sales from top players helped digest stock quickly. However, second-tier brands in transition, along with new names expanding aggressively, are brewing fresh inventory risks.

Breaking it down by brand, the strain is visible. The association's survey lists the ten brands with the deepest inventory in April: FAW Hongqi, Dongfeng Nissan, FAW-Volkswagen, Volvo, Dongfeng Honda, GAC Trumpchi, Dongfeng e-π, BYD, SAIC Volkswagen, and GAC Honda.

For dealers, 17 brands are sitting on more than two months' worth of stock. That's not just a warning number—it's real money burning on interest, lot space, and depreciation. Looking to May, as May Day show orders convert and the buzz from new models fades, the market could see a rebound.

CADA points out that while the May Day break and regional shows should unlock demand—and April's tentative orders should theoretically close—the risks are real. A flood of new launches has split customer attention. The "wait-and-see" mood—fear of buying into a falling market or holding out for deeper cuts—hasn't eased. Add in rising fuel prices and price hikes on some NEVs, and the outlook gets hazier.

With fuel prices volatile, NEV tags shifting, and hesitation lingering, a quick inventory drawdown isn't guaranteed. It will depend not just on how warm the market gets, but on dealers' ability to manage stock precisely and market flexibly.