China Automobile Dealers Association: The overall inventory coefficient of car dealers in April was 1.70, up 9.0% month-on-month

The Zhitong Finance App learned that on May 10, the China Automobile Dealers Association released the results of the “Auto Dealer Inventory” survey for April 2024: The comprehensive inventory coefficient for car dealers in April was 1.70, up 9.0% from the previous month and 12.6% from the previous year. The inventory level was above the warning line, and dealer inventory pressure increased.

Inventory factors increased year-on-year and month-on-month in January and April

The car market was slightly lackluster in April. At the beginning of the month, the People's Bank of China and the State Financial Supervision and Administration jointly issued the “Notice on Adjusting Policies Related to Auto Loans”, which states that the maximum share of private car loans is determined independently by financial institutions. Currently, brands such as Tesla (TSLA.US) and BMW have launched zero-down payment financial services. However, in the first half of the month, consumers had a wait-and-see attitude due to a wave of price cuts and the failure to issue the “trade-in policy” rules.

In late April, seven ministries and commissions including the Ministry of Commerce jointly issued the “Implementation Rules on Automobile Trade-In Subsidies”, which clarified the scope and standards of subsidies. The central government, local authorities, and car companies have joined forces to promote car scrapping and trade-in, and consumer enthusiasm for car purchases has increased markedly. However, due to the impact of the Beijing Auto Show in May and continuous rainfall in the southern region, there was a certain lag in orders and sales in April, and the car market's performance fell short of expectations.

According to comprehensive estimates, passenger car terminals sold about 1.55 million units in April, and it is estimated that the total inventory of car dealers at the end of April was around 2.65 million units. The automobile market entered the peak season in May. Policy promotion and the effects of the spring auto show. Sales expectations for May were significantly better than in April, and dealers began to enter the inventory replenishment stage to prepare for the peak season.

2. High-end luxury, imported, and independent inventory factors increased, and joint venture inventory factors declined

The inventory coefficient for high-end luxury & imported brands was 1.62, up 31.7% month-on-month; the inventory coefficient for joint venture brands was 1.81, down 4.7% month-on-month; and the inventory coefficient for independent brands was 1.67, up 12.1% month-on-month.

The brand with the highest inventory depth in March and April

According to the survey, 14 brands had an inventory factor of more than 2 months in April. Among them, the three brands with the highest inventory depth are SAIC-GM Chevrolet, Dongfeng Citroen, and Jetta.

4. Carefully anticipate market demand in May 2024 and reasonably control inventory

The popularity of the automobile market increased during the May 1st holiday. With the boom in auto shows and the implementation of the “Automobile Trade-In Subsidies Implementation Rules”, consumer confidence in buying cars was remarkable, and the wait-and-see situation of holding coins was alleviated. Driven by the May 1st holiday, there was a marked increase in customer traffic at dealer stores, and order volume and sales also showed a rapid growth trend. In summary, passenger car terminal sales are expected to be around 1.85 million units in May, which is expected to hit 1.9 million units.

The China Automobile Dealers Association suggests that according to the actual situation, dealers should rationally estimate actual market demand and reasonably control inventory levels to prevent excessive inventory pressure, leading to operating risks.