On February 28, 2023, the latest "China Automobile Dealer Inventory Alert Index Survey" VIA (Vehicle Inventory Alert Index) released by the China Automobile Dealers Association showed that the inventory warning index of China's automobile dealers in February 2023 was 58.1%, up 2.0 percentage points year-on-year and down 3.7 percentage points month-on-month, and the inventory warning index was above the boom and bust line.
February is mostly the Spring Festival month, which is the off-season for production and sales. The auto market in February was slightly better than a year earlier, but lower than car dealers' expectations. At present, the overall recovery of demand after the car market is better, and the number of customers has increased significantly compared with January, but the consumer wait-and-see atmosphere is strong. A number of car companies have successively adjusted their sales prices, and terminal promotions have increased to promote terminal sales. However, the floating interest rate of bank LPR has been reduced, and some consumer funds are mainly used to pay mortgages in advance, and the intention to buy cars is low. Coupled with the end of the policy overdraft effect and the short number of working days in February, the overall sales situation was lower than expected. The overall automotive market is expected to be stable in February, with terminal sales of passenger cars at around 1.4 million units.
In this survey, 80.2% of dealers believe that February sales did not meet expectations. The main reasons are: first, some dealers said that the manufacturer's task volume is higher, and there are more vehicles in transit, the inventory pressure is large, and the flow of funds is poor; Second, the market competition is fierce, the terminal sales price is chaotic, and the gross profit continues to decline, resulting in a decline in operating profit; Third, the economy has picked up, the number of migrant workers has increased, and the local purchasing power is insufficient, resulting in a decline in passenger flow and orders.
From the perspective of sub-indexes: inventory, market demand, average daily sales volume, employee index increased month-on-month in February, and business condition index decreased month-on-month. In February, automobile production has recovered, and dealers have strong momentum to replenish inventory; Due to fierce market competition, many car companies have reduced prices and sold dealers, and the operating conditions of dealers have declined.
In terms of regional indicators, the national total index in February was 58.1%, the northern index was 56.0%, the eastern index was 54.5%, the western index was 68.1%, and the southern index was 64.5%.
From the perspective of sub-brand type index: the index of imported & luxury brands and joint venture brands decreased month-on-month in February, and the index of independent brands increased month-on-month.
Judgment on next month's market: Since February, many provinces and cities such as Hunan, Sichuan, Ningbo and Jiaxing have issued policies to promote automobile consumption and stimulate the release of demand. Spring Auto Shows in several cities are expected to be held from late February to March, and vehicle growth is expected to stabilize in March.
Finally, the China Automobile Dealers Association suggests that manufacturers adjust their sales targets in time according to market demand to avoid excessive dealer inventory due to imbalance between supply and demand; It is recommended that financial institutions appropriately adjust and increase the interest rate subsidy for automobile consumer loans; Manufacturers can timely cash out dealer rebates, moderately increase business policy assistance and other measures.
Attached: Automobile dealer inventory early warning index survey description and regional division standards
1. Investigation and explanation of automobile dealer inventory early warning index
As early as March 2010, the China Automobile Dealers Association proposed the establishment of an "inventory early warning system", and since July 2010, it has regularly carried out inventory surveys of automobiles and dealers. In 2012, in order to reflect the industry dynamics in a more forward-looking way, the association constructed the automobile dealer inventory warning index after more than half a year of research.
The purpose of the automobile dealer inventory early warning index survey: First, grasp the pulse of the market. Through the inventory survey of automobile dealers of various brands in China, timely grasp the overall situation of the industry and predict future market trends; Second, assist in regulatory decision-making. By understanding dealer inventory changes, it provides accurate information for relevant departments to formulate control measures. Third, monitor operational risks. Timely reflect the fluctuations of production and sales in the automobile market, provide a reference for manufacturers to reasonably arrange production plans, and provide reference for dealers to formulate marketing strategies and control business risks.
According to the principle of PMI compilation, the inventory early warning index adopts the compilation method of the extended index, with 50% as the boom and bust line. Below 50% are within a reasonable range. The higher the inventory warning index, the lower the market demand, the greater the inventory pressure, and the greater the operating pressure and risk.
In order to enhance the foresight and forecast function of the inventory early warning index, drawing on the ideas and methods of PMI index construction, the inventory early warning index selects indicators closely related to the change of automobile inventory to form a comprehensive index in the indicator setting, and the relevant indicators mainly include: total demand of the automobile market, 4S store customer collection, transaction rate, price change, sales volume change, inventory change, number of employees change, liquidity status and operating conditions.
This month's dealer inventory survey mainly targets the top 100 dealer groups in China's automobile circulation industry in 2016. It covers more than 1,000 4S stores in most provinces in China, and has extensive brand coverage, covering 55 imported, joint venture and independent automobile brands mainly produced and sold in the domestic market.
2. Regional division standards
The northern region includes provinces and regions: Beijing, Hebei, Henan, Heilongjiang, Jilin, Liaoning, Inner Mongolia and Shanxi
The southern region includes provinces and regions: Fujian, Guangdong, Guangxi, Hainan, Hubei, Hunan, Jiangxi
The eastern region includes provinces and regions: Anhui, Jiangsu, Shandong, Shanghai, Tianjin, Zhejiang
The western part includes provinces and regions: Gansu, Guizhou, Shaanxi, Sichuan, Xinjiang, Yunnan, Chongqing, Ningxia, Qinghai and Tibet