China Automobile Dealers Association: Automobile consumption index in April 2023 is 75.3

On May 4, 2023, the China Automobile Dealers Association released the latest "Automobile Consumption Index": the automobile consumption index in April 2023 was 75.3, higher than the previous month.

In April, the overall performance of the auto market was calm, with fewer local stimulus policies than in March, and the market performance was relatively mild. Entering May, the first week is the May Day holiday, which is also the first long holiday after the epidemic was relaxed this year. It has a great stimulating effect on both the tourism industry and auto consumption. For auto consumption, although there have been no strong stimulus policies introduced recently, a large number of auto shows and various promotional activities in the short term combined with the first small holiday this year still brought a small peak to auto sales activities that month. In addition, the heat of the "price war" for new cars has subsided, the situation of customers holding money and waiting has been temporarily alleviated, and some dealers have cleared the inventory of National VI B non-RDE models, which are all conducive to stabilizing the auto market. Overall, if there are no major policy adjustments in May, the performance of the auto market will be better than that in April, maintaining a trend of moderate growth.

Automobile consumption index trend chart

Judging from the sub-indices that make up the automobile consumption index, the demand sub-index in April 2023 was 65.5, lower than the previous month. It is expected that the demand for car purchases in May 2023 will be slightly lower than in April, and the demand release will be slow, with little change compared with the previous month. In May, if there is no major policy adjustment, the situation in the automobile market will be basically the same as in April. The slight difference is that there will be a short holiday in May and the car sales prices in May will be more stable. However, at this stage, except for the short-term increase in consumer enthusiasm for car purchases during the auto show promotion season, the enthusiasm is not high at other times, and the increase in demand is relatively slow.

Automobile Consumption Index-Demand Sub-Index

The store entry index in April 2023 was 84.1, higher than the previous month. It is expected that the number of car buyers in stores will increase to a certain extent in May 2023. With the launch of auto shows and promotional activities in various places during the May Day holiday, the holiday + auto show model, as well as the launch of some new models, will attract more consumers to enter stores to view cars.

Automobile Consumption Index-Store Entry Index Trend Chart

The purchase sub-index in April 2023 was 80.3, higher than the previous month. It is expected that the car purchase situation in May 2023 will be better than that in April. In May, due to the support of auto shows and various promotional activities, as well as the promotional policies issued by various regions, the car sales situation will improve. However, since it will take some time for consumers to regain their enthusiasm for car purchases, the car market in May will show a moderate growth mode.

Automobile Consumption Index-Purchase Sub-Index Trend Chart

In March this year, a "price war" broke out in the new car market, and the sales prices of some brands of models dropped significantly, which led to higher expectations of car price reductions among customers, bringing some uncertainty to new car sales. In April, as the new car price reduction trend receded, the sales situation in the auto market stabilized, consumers' expectations of price reductions eased, and the stimulating effect of price reductions faded faster. It is expected that car sales in April will be basically the same as in March. In May, although there will be no major stimulus policies in the short term, with the launch of major auto shows and promotional activities in various places during the May Day holiday, the calm auto market has been given a shot in the arm. Although this is a short-term promotion, it still has a certain role in promoting the increase in car sales throughout May, and will also prompt customers to slowly increase their enthusiasm for car purchases. Overall, the auto market in May will gradually return to normal market order, and car sales will also grow steadily.

Appendix: Automobile Consumption Index Survey Description

As an industry organization, the China Automobile Dealers Association has successfully compiled and released two major indexes in the new and used car fields of the automobile distribution industry. Automobile manufacturers, parts manufacturers, dealer groups, banks, securities, consulting companies and other automobile-related companies widely use the above indicators as a reference for their operations and have received unanimous praise.

After years of development, the Chinese auto market has transitioned from a seller's market to a buyer's market, from product-centric to consumer-centric, and from supply-oriented to consumption-oriented, and the market's determinants have changed. However, at present, whether at the macro level or within the auto industry, the statistical data and indexes used are mostly from the perspective of producers, and there is almost no authoritative index from the perspective of consumers to reflect the operation of the auto industry.

To this end, the China Automobile Dealers Association, based on its previous experience in index compilation, has begun to compile an "Automobile Consumption Index" to reflect the operating trends of the automobile market from a consumption perspective.

The automobile consumption index starts from the process of consumers' car purchase intention, online search, car model attention, to the final car delivery and purchase process, and selects representative leading indicators to synthesize a comprehensive index. Specific indicators include consumer purchase intention, car purchase demand, channel dynamics, and automobile consumption environment data. Data sources include online consumer data, as well as offline data from consumers and dealers. Through model calculation, the automobile consumption index shows stable market leading nature, that is, the current data can predict the market sales trend in the next period.

The automobile consumption index is a comprehensive index greater than 0, with July 2016 as the base period. If the index value is greater than 100, it means that consumer demand is higher than the base period and the market sales volume in the next period will be high; if the index value is less than 100, it means that the market demand is lower than the base period and the market sales volume in the next period will be low.

The automobile consumption index has the characteristics of a large pattern, new perspective, full scope, full chain, authority and leading. It aims to reflect the operation status of the Chinese automobile market under the buyer's market, provide more sensitive and accurate market demand data, provide reference for the country, industry and enterprises to have a deeper understanding and interpretation of the market, and guide the healthy and benign development of the automobile industry.

The China Automobile Dealers Association has established a "China Automobile Industry Index Research Group" to be responsible for the compilation of the automobile industry index. It consists of a research group and a working group: the research group is composed of the Industry Coordination Department of the China Automobile Dealers Association; the working group is composed of the heads of dealer groups and dealer single-store operations management in various regions, who jointly participate in the construction and compilation of the China Automobile Industry Index and promote the application of the index in operations management.