The Vehicle Inventory Alert Index(VIA for short) from China Automobile Dealers Association was 67.5% in March, increasing by 16.6% on month-on-month basis, which was above the warning line.
Mr. Lang, the vice secretary-general of China Automobile Dealers Association, figured the market demand, sales index, employee index and operation state index all declined, leading to increased inventory index. The related research showed the total demand of auto market declined and same with the sales volume per day. The main reason might be the continuous influence of Spring Festival vacation from February. Besides, auto distributors placed more orders to enterprises due to the annual targets and commercial policies were confirmed, which also led to increased inventory. The market demand index was 30.1%, declining by 7.7% on month-on-month basis and the research showed 23.5% of auto distributors figured the demand would increase, more than 9.1% in February.
In addition, 29.6% of auto distributors figured the visitors to 4S shops would increase, more than 2.7% last month and the visitors increased indeed in March. But the close rate didn't increase because the visitors were more than customers. The main reasons of increased visitors were more working days in March and more market activities.
The close rate was low although the market seemed busy, which was coincide to the research. 18.4% of auto distributors figured the close rate would increase in March, less than 20.9% in February. More customers chose to wait and see. The Shanghai auto show in April was highly expected.
What's important was that the inventory index increased to 68.2% by 30.9% on month-on-month index in March. The research showed 53.1% of auto distributors figured the inventory would increase, more than 27.3% in Fabruary. The main reason was more orders of distributors and less demand of the market.
But auto distributors are optimistic for auto market demand in April. The research showed 52.6% of distributors figured the operation situation of April would be just satisfied and only 20% of distributors figured it would be excellent. Mr. Cui, the secretary-general of China Passenger Car Association, has some different ideas. He figures April is always the busy season for auto market and distributors will focus more on promotion to reduce the influence of less growth rate of auto market. Mr. Cui also predicts there will be more preferential price due to the pressure of sales target of first-half year.
