China’s Vehicle Inventory Alert Index drops 1.1 percentage points YoY in August 2021

Shanghai (Gasgoo)- China's Vehicle Inventory Alert Index (VIA) stood at 51.7% in August 2021, falling 1.1 percentage points from the previous year, while also edging down 0.6 percentage points from the previous month, according to the China Automobile Dealers Association (CADA). The index was still above the official warning threshold (50%).

Some car shopping demands were unleashed in August as back-to-school season was approaching, said the CADA. However, overall auto market in August was outperformed by that of July, which was inconsistent with conventional market rules. The abnormal phenomenon mainly stemmed from high-temperature vacations at some manufacturing plants, the sliding footfall for dealer lots, which resulted from torrential rain and resurgence of coronavirus cases, as well as the impact of the chip shortage, according to the association.

The CADA also noted the structural shortage in the auto market was further highlighted partly because the production of semiconductors and other key components was disrupted by the COVID-19 pandemic in Malaysia.

In August, the VIAs of the imported & luxury brands, the mainstream joint-venture brands, and the Chinese indigenous brands reached 47.9%, 52.5%, and 53.4%, declining 2.6, 1.2, and 2.3 percentage points over a month ago respectively, according to the CADA.

The association said China's auto sales are expected to reach around 1.5 million units in August, shrinking 10% compared to July.