China’s Vehicle Inventory Alert Index rises 6.5 percentage points YoY in Jan.

Last month, China's Vehicle Inventory Alert Index (VIA), which measures the inventory level of automobile dealers, stood at 62.7%, growing 6.3 and 6.5 percentage points over a month ago and a year ago respectively, according to the China Automobile Dealers Association (CADA).

As of Jan. 2020, the country's VIA has been exceeding the official warning threshold for 25 consecutive months.  

There were multiple factors leading to the drop in Jan. new car deliveries, according to the association. For instance, fewer consumers visited 4S shops as more people returned their homelands before the Lunar New Year holiday. Besides, deliveries in last December were inflated by the year-end promotion offered by auto dealers.

However, the CADA also said the impact from the outbreak of new coronavirus infection was limited as January included the Spring Festival holiday, a traditional slack season for auto retailers.

Compared to last December, China's self-owned auto brands featured a decrease of 11.6 percentage points in monthly VIA. Moreover, the index of the imported & premium brands and the mainstream joint-venture brands reached 62.6% and 67.6% in Jan. respectively, versus 56.5% and 58.4% over a month ago.

A CADA's survey shows that the new coronavirus epidemic will generate a considerable influence onto China auto sales in Feb. because most provincial governments requested local enterprises to delay restart of operation. Auto dealers generally expected the Feb. sales to slump over 50% from the year-ago period, and even more from a month earlier. In addition, the national auto sales for the first two months are projected to decline roughly 20% year on year if there is no further delay for most regions.