China’s Vehicle Inventory Alert Index in Apr. down by 6.9 percentage points YoY

Shanghai (Gasgoo)- China's VIA (Vehicle Inventory Alert Index) stood at 56.8% in April, a month-on-month drop of 4.2 percentage points and a year-on-year decline of 6.9 percentage points, while still exceeding the official warning threshold, according to the China Automobile Dealers Association (CADA).

The manifest decrease showed that the impact of COVID-19 is ebbing in China. Although April is a traditional off-peak season for car shopping, the automobile market posted an evident rebound owing much to the discounts offered by dealers and various governmental incentives. Nevertheless, the visitor traffic to dealerships was still lower compared to a year ago.

On the other hand, some consumers held the wait-and-see mood towards how prices would change after stimulus policies were successively rolled out, said the CADA. With the increasing launch of new models, dealers provided greater discounts to lift sales volume.

Besides, the auto sales in April were somewhat suppressed due to the falling visitor traffic as farmers in northern regions went into bust harvest season and consumers in southern regions were not accustomed to buy cars in the month because of some traditional customs factors.

In April, some automobile dealers took on higher pressure of inventories as OEMs fully restored the performance appraisal and even raised the sales target set for dealerships.

The VIA of the imported & luxury auto brands and the mainstream joint-venture brands stood at 48.9% and 57.2% respectively in April, versus 55.7% and 60.2% for the month-ago period. Nevertheless, the index for Chinese self-owned brands climbed 6.4 percentage points month over month to 67.7%.

It is notable that the imported & luxury brands saw a VIA below the warning level (50%), mainly because the demands were spurred by the shortage of supply, which was caused by the sweeping shutdown of overseas vehicle and auto parts manufacturing plants amid the pandemic spread.