Chinese inventory warning index of automobiles reached 61.8% in November with a monthly rise of 7.7%, which went beyond the warning line, according to statistics from China Automobile Dealers Association (short for CADA).

 

The sharp increase of inventory index is related to the dramatic decline of market demands in November. Thanks to the policy halving the purchase tax and the motivation brought by auto show, market demands increased to some extents, leading to the decline of dealers inventory according to Lang Xuehong, vice secretary-general of CADA.

 

However, automakers will begin new round of inventory overstocking in the end of this year, resulting in that dealers will face high inventory. Meanwhile, considering the recovery value of used vehicles, some customers prefer not to purchase new vehicles until middle December so that they can get license plate next year. And that weather turns cold also dampened consumer demand to a certain extent.

 

The total market demands index reached 43.9%, with a monthly decline of 11.3% in November; the inventory index stood at 69.6%, increasing by 10.3% compared to that of last month; the sales index reached 40.5%, decreasing by 14.4%.

 

In November, total market demands and the average daily sales decreased obviously;the number of employee remained stable; business condition index rose; and inventory index increased considerably compared to that of last month.

 

"Automakers should pursue sales based on market shifts. Transferring too much inventory to dealers may cause tense conflict between automakers and dealers like that in last year. On the contrary, both automakers and dealers should develop a sustainable relationship," pointed out Xiao Zhengsan , secretary-general of CADA.