Inventory alarm exceeded for 10 months in China

The automobile inventory alert index reaches 53.4% in July in China, exceeding the 50% inventory warning threshold for the tenth consecutive years, according to the statistics of China Automobile Dealers Association.

The automobile inventory alert index of July in China decreased 11.2% from a month earlier to 53.4%, a 1.6% increase compared with that of a year earlier. The reason for the month-on-month drop is that the general demand for vehicles in Chinese market increased in July and the new vehicle delivery and the amount of customers have been increased in the June, said Lang Xuehong, the deputy secretary-general managing industrial coordination in the China Automobile Dealers Association. He also predicted that the general demand for vehicles will continue to increase in August.

With the remaining high car inventory alert index, car dealers in China are faced with great challenge in combating low sales. According to Lang Xuehong, this is contributed by the minimal increase of the overall domestic economy in China, and the low demand for vehicles, as well as the competition from emerging e-commerce platform.

The Association also released second-hand vehicle delivery in June in China of 760,000 units, which means the volume of trade increasing from the previous month to 44.76 billion CNY. Meanwhile, the new car delivery volume decreased less than that of the second-hand car, indicating the second-hand car market holds more potential of growth.