On April 7th, twenty-four dealers of Changan Ford’s in Hunan Province has started a jointly protest against the car manufacturer from forcing inventory on them. Reportedly, Chinese market’s inventory warning index has been stood above the warning line of 50%, which reflects dangerously high inventory level, since the October in 2014, except for a brief cool off of 48.7% in last August. Establish carmakers including Volvo, BMW, Audi and Mercedes-Benz are all affected.

 

A sales representative from dealers of a well-known international brand revealed that the dealer he/she worked at has lost 2.7 million RMB in this March because the manufacturer requested them to boost sales, even at a loss.

 

Xiaoyuan, an industrial expert, said that the auto inventory in China has accumulated to 1.2 million units, which causes an inevitable contradiction between dealers and manufacturers.

 

In the noon of April 7th, an open letter to Changan Ford wrote by 24 Changan Ford dealers in Human Province and signed by 16 of them went viral on the wechat platform, which said “Given the relatively high inventory pressure, operating difficulties and great losses, we, all the Changan Ford dealers in Hunan Province, ask your Company to stop forcing permanent and temporal credit lines (apart from imported vehicles) from April 7th on us temporarily, otherwise all the consuquense inccuring shall be on your own account.” As of April 15th, no further news has been released.

 

According to China Association of Automobile manufacturers, the auto inventory in China rose 3.1% to 1,187,300 units at the end of last November, up against 1,151,500 units at the beginning of the same month.

 

Besides, the inventory warning index stood at a dangerously 58.9% in this March. It’s reportedly that four 4S dealers in Jinan Province had run off to get away from high inventory pressure.

 

China Auto Dealers Chamber of Commerce predicted that 30% of dealers nationwide will be closed. If the prediction is positive, around 6,000 dealers will be closed given the current number of dealers in China.