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China’s Vehicle Inventory Alert Index drops 0.7 percentage points YoY in June 2021

China's Vehicle Inventory Alert Index (VIA) stood at 56.1% in June 2021, edging down 0.7 percentage points from the previous year, while climbing 3.2 percentage points from the previous month, according to the China Automobile Dealers Association (CADA). The figure was still above the official warning threshold.  

Due to the traditional off-season for car shopping and the chip shortage that brought impact on auto capacity and wholesales, many automakers wound down production in June and took high-temperature vacation earlier than the corresponding period in previous years, said the CADA. Meanwhile, they also loosened the appraisal of dealers' performance regarding the volume of cars picked up, thus absolute inventories of dealerships were further decreased.

On the other hand, dealers also replenished their inventories in June to fulfill the semi-annual wholesale target set by OEMs.

According to the association, some dealers saw operating profits fall last month as consumers delayed buying cars or cancelled orders due to the uncertain delivery date for some hotter-selling models.

The CADA noted the projects of “bringing automobiles to the countryside” carried out in Shandong, Chongqing, Henan, and other regions, the incentives given by Shanghai and Hainan to boost car sales, and many small-sized motor shows will to some degree drive car consumption in July.

The VIAs of the imported & luxury brands, the mainstream joint-venture brands, and the Chinese indigenous brands amounted to 54.4%, 56.1%, and 58.7%, rising 1.7, 1.1, and 1 percentage points over a month ago respectively.