Pace may shift at auto market in the next half year

CADA published “Survey Result of Car Dealers’ Inventory” of June recently. Car dealers’ integrated inventory index declines to 1.53, whichdeclines0.45over the same period of last yearand declines 0.05 on month-on-month basis.However, itexceeds the warning line.

According to statistics, inventory index of own brand has declineddramatically. It declines from 2.03 of last month to 1.62 of June which alleviates inventory pressure, but still exceeds the warning line; inventory index of joint venture increase slightly to 1.48, which remain reasonable; the figure for imported brand decreases by last month to 1.88, which still can’t be optimistic although inventory pressurerelieved a little bit. High inventory brands reduce 5 to 3 brands. The highest inventory index is Chery, which up to 3.17, and its average sales for each single shop is 35 cars.

The sample survey includes 55 brands that only 3 brands’ inventory indexesexceed 2.5. They are Chery, Jaguar - Land Rover and Beijing Automotive. High inventory brands only take 6% of the survey. Inventory of imported brands deceased that only Jaguar- Land Rover exceeds warning line.

CADA believes 2 main reasons can explain the decreased inventory for June: it is a slack season and manufacturer pile up inventory slower, which alleviates inventory pressure of dealers. On the other side, June is the summing up season, manufacturers and dealersadvertise promotion for sales as well, which may stimulate sales.

According to introduction, sales of June remain the same with May’s. Many dealers choose to promote for sales and rebate, which contributes to inventory decrease as well.

CADA says, auto industry remain increasestably, and industry prosperity better than expectation. However, macroeconomics is uncertain in the next half year, and auto market still under downstream risk. Therefore, car dealersstill need to take care of market, and beware of inventory risk.