Automakers' production capacity has been hit, and dealer inventory coefficient in June is below the warning line

Automakers' production capacity has been hit, and dealer inventory coefficient in June is below the warning line

According to the "Auto Dealer Inventory in June" survey data released by the China Automobile Dealers Association recently, affected by the high base in 2020, the dealer inventory coefficient in June fell sharply by 14.9% year-on-year and 2.0% month-on-month to only 1.48, which has exceeded the warning line.

Overall, the auto market has been in a state of passive destocking this year. In January this year, auto sales were about 2.4 million units, absolute inventory was about 3.7 million units, and dealer inventory coefficient was 1.53; auto sales in June fell by about 10-15% month-on-month compared with May, absolute inventory was about 2.2 million units, and dealer inventory coefficient was 1.48.

In the first half of this year, dealer inventory levels fell significantly by 40.5% year-on-year compared to 2020.

For the first half of the year, the main reason for the decline in inventory levels was the global chip shortage. However, because the chip shortage has a greater impact on luxury models and joint venture models, the inventory level of domestic brand cars is relatively stable.

In addition, the China Automobile Dealers Association pointed out that the decline in inventory levels was also affected by weather conditions in some factories’ areas. Upstream manufacturers arranged high-temperature holidays in advance, which also led to a decline in automobile production capacity and the dealer inventory coefficient was below the warning line.

Under the double blow of chip shortages and weather reasons, most dealers have insufficient inventory of best-selling models, and delivery is scheduled for several months later. Some manufacturers have begun to cancel inventory assessments of dealers and adjust their promotional strategies.

The China Automobile Dealers Association said that due to the chip shortage and the high temperature holiday, sales are expected to continue to decline in the off-season in July, down about 5% month-on-month. If the chip shortage problem is solved in the fourth quarter and the manufacturer's production capacity is released, dealers may increase preferential activities to make up for the sales loss in the first half of the year, thus triggering a new round of price wars in the automobile market.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.

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