China’s Vehicle Inventory Alert Index drops 4.6 percentage points YoY in Sept.

Shanghai (Gasgoo)- China's Vehicle Inventory Alert Index (VIA) stood at 54% in September, which rose 1.2 percentage points compared to the previous month, while dropped 4.6 percentage points over the previous year, according to the China Automobile Dealers Association (CADA).

The VIA in September was still above the official warning threshold.

The association expected the automobile retail sales to hit a new high in September as the Beijing International Automotive Exhibition and a number of small-scale motor shows held during that month spurred the growth of market demands and sales in some regions.

In the fourth quarter, the sales pressure piling on automobile dealers will not be reduced as the stimulus effect is not that evident in spite of the release of supporting policies and substantial discounts, said the CADA. Besides, some OEMs have increased the retailing targets, which are more difficult for dealerships to fulfill, leading to higher inventories and lower incomes for dealers.

The VIAs of the imported & luxury brands and the mainstream joint-venture brands reached 47.3% and 57.6% in September respectively, 0.8 and 2.9 percentage points higher than the month-ago level. Notably, the index of the China's self-owned brands dropped 2 percentage points month on month to 54.3%, indicating a lower inventory pressure on indigenous brands.

Policies to spur car consumption will be retained in some regions in October, while vehicle sales are unlikely to represent growth as the better-than-expected increase in August and September has already unleashed part of demands. According to the CADA, China's automobile retail sales in October are forecasted to be 1.75 million units, remaining flat from a year ago, while edging down compared to the previous month.