China’s auto dealer inventory warning index stood at 54.0 percent in May, down 7.0 percentage points compared to April, while up 0.3 percentage points year on year, as announced by China Automobile Dealers Association (CADA). May is the 17th successive month during which the auto dealer inventory warning index has exceeded 50.0 percent.
In May, due to moves in China to introduce new stricter vehicle emissions standards, auto dealers were very active in seeking to reduce their inventory levels.
As for June, CADA expects that auto dealers will continue to push to achieve their sales targets and will be willing to reduce prices in the last month before the implementation of new vehicle emissions standards. However, demand will likely remain slack as fewer consumers in rural areas will conclude purchases during the wheat harvest season.