China's vehicle inventory alert index in July 2023 climbs both YoY, MoM

Shanghai (Gasgoo)- China's vehicle inventory alert index (VIA), which reflects the inventory pressure on automobile dealers, rose 3.8 percentage points month on month in July 2023, according to the China Automobile Dealers Association (CADA).

The VIA stood at 57.8% last month, climbing 3.4 percentage points from the previous year.

The index in July 2023 was still above the official warning threshold (50%).

July is traditionally a slack season for the automotive market, characterized by weakened demand, slower production and sales pace by manufacturers and dealers, and reduced promotional incentives in the retail market. Additionally, the scorching summer weather and frequent rainfall have negatively impacted customer footfall and transaction rates. Despite these challenges, the market saw some uplifting factors during the latter half of the month, such as the newly implemented "Ten Measures" to boost automobile consumption at the national level and the introduction of the second round of local government car purchase subsidy policies.

Overall, the performance of the automotive market in July remained subdued, with passenger car retail sales estimated to be around 1.7 million units, experiencing both month-on-month and year-on-year declines, said the CADA.

However, prospects for August seem promising. The back-to-school season is expected to bring incremental demand for car purchases. Furthermore, the commencement of events like the "818 Car Shopping Festival" and the opening of autumn car shows in various cities, showcasing numerous new car models, combined with the implementation of new local policies to stimulate car consumption, are likely to stimulate further growth in automotive demand.