China Automobile Dealers Association: Automobile consumption index in June 2023 is 74.2

On June 30, 2023, the China Automobile Dealers Association released the latest "Automobile Consumption Index": the automobile consumption index in June 2023 was 74.2 , slightly lower than the previous month.

July is coming, and half a year has passed. According to regional terminal sales data, the overall sales of automobiles in the first half of this year showed an upward trend. However, due to factors such as the "price war" in automobile sales in March, the normal sales rhythm was disrupted, resulting in automobile sales in the first half of the year not meeting expectations. According to the results of this round of dealer surveys, 80% of dealers reported that they did not achieve their sales targets in the first half of the year, and only about 20% of dealers achieved their sales targets. How the automobile market will perform in the coming July depends on whether there are major factors such as strong promotion policies in that month. According to the trend of automobile sales in previous years, the automobile market gradually entered the off-season in July due to factors such as high temperature and rainy weather. At the same time, July is also the first month of the third quarter. Dealers said that after the rush in June, the sales rhythm this month will slow down, and the support of some promotional policies will also weaken. In addition, the dealers' rush in June for half a year overdrew some customer demand in July. Overall, if there is no strong promotion policy in July, then the automobile sales in July will be basically the same as in June, and there may be a slight decline due to insufficient growth momentum.

Automobile consumption index trend chart

Judging from the sub-indices that make up the automobile consumption index, the demand sub-index in June 2023 was 68.5, lower than the previous month. It is expected that the demand for automobile purchases will decrease in July 2023. In June, some manufacturers carried out promotional activities to achieve their half-year sales targets, which overdrew part of the demand for automobile purchases in July. In addition, July is also the traditional off-season for automobile sales, which led to a decrease in the demand for automobile purchases in that month.

Automobile Consumption Index – Demand Sub-Index

The store entry index in June 2023 was 68.9, lower than the previous month. It is expected that the number of consumers entering stores to buy cars in July will decrease. Since July has entered the hot and rainy weather, if there are no strong promotional policies or promotional activities in July, the store traffic in that month will be affected to a certain extent.

Automobile Consumption Index – Store Entry Index Trend Chart

The purchase sub-index in June 2023 was 77.6, lower than the previous month. It is expected that the car purchase situation in July 2023 will be the same as that in June or slightly lower. July is the first month of the third quarter. Dealers said that after the rush in June, the sales pace will slow down this month and the promotion policy will be weakened. At the same time, July is also the traditional off-season for car sales, which will have a negative impact on car purchases in that month.

Automobile Consumption Index – Purchase Sub-Index Trend Chart

At this stage, there are not enough favorable factors in the automobile market, and practitioners' consumer confidence in the automobile market also needs to be improved. According to this round of dealer surveys, more than 40% of dealers believe that automobile sales in the second half of the year will decline year-on-year, and dealers who said that they would increase accounted for about 30%, which is lower than those who said that they would decline. In order to stabilize the automobile market and promote the increase in automobile sales, we expect that better promotion policies will be introduced in the second half of the year.