China’s auto dealer inventory warning index stood at 81.2 percent in February, 18.5 percentage points higher compared to that recorded in January, hitting its historical highest level, as announced by the China Automobile Dealers Association (CADA).
February was a critical period for the prevention and control of the coronavirus in China, when the sharp decrease in customers and the extended holiday period exerted a negative impact on the automobile market.
Lang Xuehong, deputy secretary general of CADA, said most 4S stores delayed their opening dates, with only 50 percent of 4S automobile sales service shops opening in the first half of February and operating at half their normal activity levels. 80 percent of 4S stores are expected to open by the end of March, while it is expected that few customers will conclude purchases of vehicles unless they have an urgent need to buy a car.
Automobile sales in China will likely improve in March compared to February, while auto dealers have been under strong pressure from tight liquidity. Mr. Lang Xuehong said current inventories of all auto dealers in China total around 3.0 million units, and so dealers are unlikely to build up stock from automakers until mid-March. He also foresaw that the auto market will return to normal conditions by May.