Shanghai (Gasgoo)- The China Automobile Dealers Association ("CADA") recently released the latest "China Automobile Dealers Inventory Alert Index" (VIA), showing that in December 2024, the VIA for Chinese automobile dealers reached 50.2%, representing a year-on-year decrease of 3.5 percentage points and a month-on-month decline of 1.6 percentage points.
With the index approaching the boom-bust threshold (50%), the automotive distribution industry is witnessing a steady improvement in market sentiment.
December marked the final push for automakers to achieve their annual sales targets. The combination of nearing expiration for vehicle scrappage and trade-in subsidies, along with a surge in car-buying demand before the Chinese New Year holiday, spurred the market heat. Automakers across China intensified promotional efforts, rolling out discounts, zero-interest financing plans, and enhanced customer incentives, leading to an expected rise in retail sales.
With the Chinese New Year holiday approaching, the reduced number of working days and many consumers returning to their hometowns or traveling for the holidays are expected to result in a sharp decline in showroom traffic, said the CADA. Additionally, the industry may face a "price recovery adjustment period" following aggressive December promotions, which could further impact transaction rates. Consequently, January 2025 sales are projected to see a significant drop compared to December 2024.
