AutoBeta(AutoBeta.net)04/01 Report--

After the worst impact of the epidemic in February, the inventory early warning index of Chinese car dealers reached a new high of 81.2%. Thanks to the effective control of the domestic epidemic in March, the inventory early warning index stabilized.

According to the latest inventory report of Chinese car dealers released by the China Automobile Circulation Association, the dealer inventory early warning index was 59.3% in March, down 27.0% from the previous month's historical index of more than 80%. But the inventory early warning index is still above the rise and fall line, up 7.2% from a year earlier.

The association said that the epidemic was effectively controlled in March, consumer travel increased, customer collection recovered week by week, and market demand slowly increased, resulting in a sharp drop in the dealer inventory warning index from the previous month.

With the epidemic gradually under control, Hubei, for example, resumed work and production in mid-late March. As of March 31, 2020, the resurrection rate of dealers and stores reached 95.5%, while the passenger flow recovery rate reached 64.0%, and the sales efficiency reached 61.7%. The domestic automobile market is gradually getting back on track. In that month, consumers' willingness to buy gradually increased, realizing the release of potential customers from January to February.

Due to the gradual recovery of passenger flow, the vast majority of manufacturers have begun to resume assessment in March, gradually increasing requirements for dealers to pick up cars, and only a few manufacturers consider increasing task assessment and batch sales in April, so that the inventory pressure of dealers has been increased again.

However, according to the Federation, judging from the current progress of the recovery of the car market, the phenomenon of explosive growth in demand is still not prominent, and the weekly sales performance is still stable compared with the same period last year. Although many governments have planned to introduce policies to stimulate the car market, the actual implementation of the policies in some cities is not expected to take effect until April, and the effect of the start-up period of the policy is generally not very prominent, and the effect is generally the most obvious until the last bus before the policy is withdrawn.

According to the performance of dealers' purchases in the first three weeks, they were 12600, 15700 and 24000 respectively, down 68 per cent, 67 per cent and 53 per cent respectively from a year earlier. It can be seen that the retail recovery did not exceed expectations, corresponding to the current retail inventory is still high, so that dealers lack confidence in restocking.

The China Automobile Circulation Association said that at present, it is difficult to see a strong outbreak of car demand in the short term. It is suggested that we should increase the number of urban car license plates, encourage the scrapping and replacement of cars through subsidies, implement fiscal and tax support such as purchase tax relief, cars going to the countryside, further promote the convenient trade of second-hand cars, adjust used car taxes, temporary registration and relocation restrictions. Appropriately delay the full implementation of the national six emission standards.

As for the future, Lang Xuehong, deputy secretary general of the China Automobile Circulation Association, said that the current epidemic has a serious impact on the car market, and the downturn in new car sales will continue. During the epidemic period, dealers should put blocking the spread of the epidemic in the first place, increase the intensity of online marketing, and do a good job in disinfection of sales and service places and protection of staff. Strictly implement the relevant procedures and norms of epidemic prevention in the process of service to ensure the safety of consumers. At the same time, do a good job in fund management, control costs and expenses, and reduce operational risks.

Of course, automobile as a major consumer goods, if we can gradually stabilize and expand automobile consumption and promote the upgrading of automobile consumption as soon as possible, it will not only provide a stronger guarantee for the rapid recovery of car sales, but also help the rapid recovery of the domestic economy.

In response, Premier Li Keqiang of the State Council also put forward a number of policies to promote automobile consumption at the executive meeting of the State Council on March 31. The meeting decided that, first, the subsidy for the purchase of new energy vehicles and the policy of exemption from purchase tax should be extended for two years. Second, the central government has adopted awards instead of subsidies to support the elimination of diesel trucks with national III and lower emission standards in key areas such as Beijing, Tianjin and Hebei. Third, second-hand car dealers will sell used cars, and value-added tax will be levied on sales reduced by 0.5% from May 1 to the end of 2023.

However, as mentioned above, the proposal of promoting automobile consumption policy plays a certain role in stimulating automobile consumption, but the actual effective time of local policies and the final confirmation of policies can really achieve a rebound in sales.

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