On January 31, 2024, the latest VIA (Vehicle Inventory Alert Index) released by the China Automobile Dealers Association showed that the inventory alert index of China's auto dealers in January 2024 was 59.9%. It dropped by 1.9% year-on-year and increased by 6.8% month-on-month. The inventory warning index is above the boom-bust line, and the automobile circulation industry is in a sluggish range, with the prosperity declining from the previous month.

The 2024 Chinese New Year is almost here, and compared to the booming sales at the end of the year, the auto market has cooled down significantly. As the end-of-December sprint sales target overdrafts some of the demand, the wave of returning home and pre-holiday car purchase demand will still support auto market sales. A new round of local car purchase subsidy policies has been launched in various places, but the overall discount intensity of terminals has been withdrawn, affecting transactions. In order to achieve a good start in 2024, some car companies have launched official direct sales activities in the New Year, which will benefit the growth of terminal sales in January. It is comprehensively estimated that the terminal retail sales of passenger cars in January will be around 2.2 million units. Due to the low base in the same period last year, the year-on-year increase was relatively large, but it fell back month-on-month.

As the consumption-promoting policies expired last year, a new round of subsidy policies has not yet been fully introduced, resulting in a heavy wait-and-see sentiment among consumers. Car sales in January were lower than expected, and dealers' sales pressure increased. In order to celebrate the New Year with ease, we will continue to clear inventory and have a low willingness to replenish inventory.

From the perspective of sub-indices： In January, the inventory, market demand, average daily sales, and employee index decreased month-on-month, while the operating conditions index increased slightly month-on-month. Due to an overdraft of demand for the year-end sprint sales target in December, dealers' sales pace has been slightly adjusted, and the performance of the auto market in January was not as good as that of the previous month.

From the perspective of the regional index: In January, the national total index was 59.9%, the North District index was 65.8%, the East District index was 61.3%, the West District index was 51.9%, and the Southern District index was 52.8%.

From the perspective of brand type index: In January, the luxury and imported joint venture, and independent brand indices rose month-on-month.

Forecast on next month’s market: In February, affected by the Spring Festival and fewer working days, dealer traffic and sales will see a significant decline, and the auto market will enter the traditional off-season. Regarding the performance of the auto market in 2024, dealers have polarized views: some dealers believe that the auto market will continue to grow in 2024, with 25.3% of dealers believing that the growth rate will be within 5%; other dealers believe that the auto market will experience negative growth in 2024, 21.1% of dealers believe that the decline will be between 5% and 10%.

It is expected that the involution of the automobile industry will continue in 2024. It is recommended that dealer groups invest prudently during the brand-switching process, adjust the inventory structure, strengthen capital management and control, and ensure the safety of cash flow. The China Automobile Dealers Association will serve as a bridge between automobile companies and the government, keep abreast of industry conditions and corporate demands, and call on the government to introduce more policies to promote automobile consumption.