On May 29, the China Automobile Dealers Association (CADA) submitted a report to China’s National Development and Reform Commission (NDRC), Ministry of Industry and Information Technology (MIIT), Ministry of Commerce (MOC) and State Administration of Market Supervision, in which it makes recommendations for automobile producers in China. In the report, CADA suggests auto producers should base their production on sales in order to lower inventory levels, that they should establish a price adjustment system determined by market supply and demand, and build up a reasonable distribution of sales channels.
According to CADA’s research data, the average auto dealer inventory coefficient for 2018 was 1.73, higher than the early-warning level of 1.5. Meanwhile, the auto dealer inventory coefficient stood at 2.0 in April this year. Currently, inventories of automobiles in China amount to more than 3.0 million units, equivalent to a two-month sales volume, and this exerting negative pressure on China’s auto industry.
China’s auto industry posted negative growth for 2018, with auto dealers’ revenue indicators dropping significantly, threatening the survival of many dealers.