In the past June, China's auto market presented a complex and changeable picture. According to the "China Auto Dealer Inventory Warning Index Survey" released by the China Automobile Dealers Association, in June, the inventory warning index of China's auto dealers reached 62.3%, up 8.3% year-on-year and 4.1% month-on-month, which clearly shows that the inventory pressure faced by dealers should not be underestimated. (Tips: The formula for calculating the Inventory Warning Index for Auto Dealers is Inventory Retention Funds/Circulating Funds, with 50% as the boom and bust line)
At the end of the half-year, car companies and dealers in the passenger car market have spared no effort to sprint sales performance. However, despite their efforts, the market has not performed as well as it should.
According to the data released by the Passenger Car Association, from June 1 to 23, the passenger car market retailed 1.087 million units, a year-on-year decrease of 12% and an increase of 2% over the same period last month. This data reflects a more pronounced year-on-year decline in sales volumes, despite a slight month-on-month increase, highlighting the current lack of domestic consumer confidence. At the same time, due to the existence of objective factors such as hot weather and rainy climate in the south, it has also produced a lot of obstacles to the collection and transaction of dealers. In addition, the mid-year impulse led to higher wholesale volumes in May and June, which also led to an increase in dealer inventories in June.
In this context, new energy vehicles are still the main driving force for sales growth. From June 1 to 23, the NEV market retailed 534,000 units, up 19% year-on-year and 7% month-on-month. From the perspective of single-week sales trends, the sales decline in the first week of June was more obvious, but the third week increased rapidly, up 38% month-on-month, showing an overall upward trend. The China Automobile Dealers Association expects terminal sales of passenger cars to rise slightly in June compared to the previous month, to about 1.75 million units.
In addition, the completion of dealers' sales tasks in the first half of the year was significantly differentiated. According to the survey, only 18.4% of dealers have completed the task, 34.8% of the dealers have completed the task rate of more than 80%, and 13.5% of the dealers have completed the rate of less than 50%. In order to hit the semi-annual mission goal, the phenomenon of dealers "exchanging price for volume" is not uncommon, and the price of new cars continues to fall, resulting in a low gross profit of naked cars and a deterioration of the dealer's operating status. Even some of the top 100 dealers who are influential in the industry have begun to appear turbulent, such as a well-known domestic auto dealer group, its share price continued to fall, as of the close of June 28, the stock price has fallen below 1 yuan for 7 consecutive trading days, if this situation continues, it will likely face the risk of delisting, such a situation will also have a certain impact on other dealers.
In the current market environment, the continued sluggish consumption of conventional fuel vehicles has become a key factor inhibiting the overall recovery of the auto market. However, the state is playing an active role in the overall consideration and accurate grasp of "promoting consumption and boosting domestic demand". The implementation of policies such as trade-in has reasonably ensured the replacement demand of fuel vehicle consumer groups. As of June 25, the Ministry of Commerce's car trade-in information platform has received 113,000 applications for subsidies for scrapping and updating automobiles, and the number of new subsidy applications has exceeded 36,000 in the past week.
According to the practice of previous years, July is the traditional off-season for the auto market. Dealers generally believe that the overall market performance will be in line with June. Due to the adjustment of the price war, the preferential efforts of many car companies have contracted, and consumers' willingness to buy has declined, and the wait-and-see sentiment has increased. For the automotive market in the second half of the year, dealers are more cautious in their expectations. Among them, 22.0% of dealers believe that it is basically flat, and 17.7% of dealers believe that sales will decline by more than 15% in the second half of the year.
The China Automobile Dealers Association released that in such a market situation, the uncertainty of the automobile market in the second half of this year will increase day by day, in order to reduce operating losses, dealers need to rationally estimate the actual market demand according to the actual situation. At the same time, we will increase the publicity of the "trade-in and scrapping renewal policies", boost consumer confidence by strengthening services, and put cost reduction and efficiency improvement in the first place to effectively prevent business risks.
Summary:
The inventory warning index can reflect the supply and demand of the automobile market. At the current high index level, dealers may offer more discounts and promotions in order to quickly eliminate inventory return funds, and for consumers, there may be better negotiation space to negotiate for better prices when buying a car during this period. Of course, everything has its two sides, a healthy and orderly, balanced market environment of supply and demand, is conducive to the better and faster development of the entire industry.