China’s auto dealer inventory warning index stood at 60.7 percent in December last year, 0.2 percentage points higher than the 60.5 percent recorded in November, while 1.7 percentage points higher compared to the same month of the previous year, as announced by the China Automobile Dealers Association (CADA).
According to CADA, the inventory warning index has remained above 50.0 percent for three consecutive years, reflecting a period of adjustment for China’s vehicle market, with annual vehicle sales indicating negative growth since 2018.
The Covid-19 pandemic in 2020 forced consumers to buy private cars to ensure safety as much as possible, which exerted a positive impact on car sales. At the same time, measures to stimulate vehicle consumption also positively affected car sales.
Lang Xuehong, deputy secretary general of CADA, said that the continuous rebound of new car sales in recent months will likely help lower the inventory warning index. It is thought that the inventory warning index may return to a normal level, likely below 50 percent, gradually.