VIE (Vehicle Inventory Alert Index), published by CADA (China Automobile Dealers Association), in October was 54.1%, declining 1.6% from November. VIE is still above the alert line.

 

The automobile market is entering into a selling season, with increasing demands and purchasing power. Vehicle purchase tax halving benefits for vehicles with displacement less than 1.6L have taken effect from October 1th and this policy has inspired the automobile market. However, influenced by several problems such as talents loss in automobile dealers, financial strain, high pressure of handling unsalable inventory, lack of funds to purchase best-selling models, the overall inventory is still large for dealers and the operation situation has not been significantly improved.

 

The total market demand index was 55.2% in October, increasing 1.8% with September. Investigation shows that dealers believe the total demand increasing account for 37.0% from 36.2% in September, and those believe leveling account for 39.9% from 39.5%, while those believe declining account for 23.1% from 24.3% in September.

 

Number of people visiting outlets declines in October, with dealers believing the number declining occupying 27.7% from 27.6% in September, dealers believing increasing occupying 28.9% from 30.3% and those believing leveling occupying 43.4% from 42.1%.

 

For turnover rate, 21.4% believe it is declining, 32.9% believe it is leveling, 45.7% believe it is increasing, compared with 25.7%, 32.9% and 41.4% respectively in the previous month.

 

Dealers sell more in October and inventory is leveling with the data in September. Inventory Index was 59.2% in October, increasing 0.1% with September. Investigation shows that among dealers, believing inventory increasing occupying 35.8% from 32.9%, leveling occupying 42.2% from 46.1% and decling occupying 22.0% from 21.1%.

 

Circulating fund situation is better than September for dealers but fund strain has not been solved yet. Dealers believing circulating fund is ample account for 16.8%, believing fund shortage account for 24.3%, and the rest account for 59.0%, with the previous number of 15.8%, 28.3% and 55.9% respectively.

 

It is expected that market demand in November will level with that in October. Proportion of dealers believing market demand is increasing declines from 42.1% to 38.2%. Proportion of dealers believing market demand is declining declines from 13.2% to 11.0% and proportion of dealers believing market demand is leveling increases from 44.7% to 50.9%.

 

Dealers’ operation situation in November is expected to level with October. Investigation shows that proportion of dealers believing good situation in November declines from 22.4% to 18.5%, and proportion of dealers believing bad situation in November declines from 19.1% to 17.3%.

 

The above data shows that total market demand in November is expected to level with October. Considering automobile producers will increase production and dealers face more inventories, CADA suggest dealers should make rational judgments and adjust inventory in accordance, in order to decrease the operation risk brought by inventory adjustments.