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Dealers’ Inventories Decline in February as China’s Auto Sales Pick Up




Summary


  • Chinese auto dealers' inventories dropped in February, mainly due to efforts to clear stock before the Chinese New Year and adjustments in vehicle procurement pace.

  • The Vehicle Inventory Alert Index (VIA) for dealers fell to 56.9% in February from 64.1% a year earlier, indicating a recovery in car sales.

  • Price cuts and promotions, including Tesla's largest-ever discount on the Model 3 series, boosted market recovery, but dealers are still facing tight cash flow and high operational risks.


 

In February, Chinese auto dealers saw a significant drop in their inventories, reflecting a shift in the market dynamics. The Vehicle Inventory Alert Index (VIA), which tracks the balance of supply and demand at dealerships, dropped to 56.9%, a decline from 64.1% last year and 62.3% in January. The reduction in stock was primarily driven by efforts to clear inventory ahead of the Chinese New Year holiday and a strategic adjustment in vehicle procurement pace.

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