Chinese dealers cheered up by auto demand growth in August

Dealer inventory early warning index stood 48.7% in August, down 1.6% on a year-on-year basis, first below the 50% safe index after 10 months, according to China Automobile Dealers Association.

Demand rise for cars in August can be ascribed to more frequent dealer marketing activities, and normal demand rise after the summer break in China.

A clear warming trend will take on in Chinese auto market within this year based on the current situation, which is estimated by insiders.

Specifically for five sub-index composing early warning index of total market demand, sales volume, employment index operating conditions and inventory level, the first four increased while the last one decreased, which amounts to overall preferential situation.

In the longer term, China's auto market is facing adjustment, which may last for a long time. Thus it is normal to witness overall recession currently. On the other hand, dealers rise in reaction through various promotional activities along with quality before and after sale service.

There are 20.6% dealers who vote for total demand growth, the proportion of which was 12.3% in a month earlier. Dealers who believe in basically equal total demand account for 41.3%, compared with 37.0% of last month. Proportion of dealers who estimate shrinking total demand decreased from 50.7% of a month earlier to 38.1%.