AutoBeta(AutoBeta.net)06/11 Report--

Dealers inventory depth level is an important indicator to measure the status quo of a brand. A few days ago, China Automobile Circulation Association released May auto dealer inventory report, survey results show that in May auto dealers comprehensive inventory coefficient of 1.65, up 4% year-on-year, month-on-month decline of 18%, inventory level is above the warning line.

Compared with the inventory depth and inventory clearance pressure in February, March and April, the current situation of dealers in May has eased. Thanks to the key period of switching between five countries and six countries in May and June, all dealers are speeding up the clearance of inventory vehicles in five countries, and they are more cautious about wholesale vehicles.

However, another problem is that dealers sell five inventory vehicles at a big discount. Even if the inventory problem is reduced, the business environment continues to deteriorate and the level of enterprise benefits declines significantly. According to statistics, the gross profit of new vehicles of dealers decreased from 5.5% in 2017 to 0.4% in 2018, and the loss of dealers increased from 11.4% in 2017 to 39.3%. In 2019, except for a few brands, the gross profit of new vehicles of dealers was generally negative.

In terms of brand category, the inventory coefficient of independent brands, joint venture brands and high-end luxury brands decreased month-on-month in May. The inventory coefficient of independent brands was 1.81, down 29% month-on-month, which is still at a high level.

More importantly, the survey shows that there are five brands with inventory depth of more than two months in May, namely GAC Chuanqi, Dongfeng Yueda Kia, Dongfeng Citroen, Chery and Chang 'an passenger cars.

It can be seen that the overall performance of the above five brands this year is not good. Among them, the sales volume of new cars of GAC Chuanqi in May was 27953 units, down 27% year-on-year. The cumulative sales volume in the first five months was 142823 units, down 38.2% compared with 231099 units in the same period last year. GAC believes that the negative growth of automobile market makes dealer inventory increase, inventory reduction and inventory removal are still the main tasks of GAC Group this year.

Chang 'an and Chery are also among the independent brands with the largest inventory pressure. Chang' an Automobile was once an independent automobile brand with annual sales of millions, once ranking first in its own position, but since 2018, Chang 'an's independent and joint-venture brands have declined significantly. Chery was also the leader of independent automobile enterprises, sales are weak and inventory pressure is large, we can see that Chery is also an independent brand declining in the automobile market downturn.

Automobile circulation association survey shows that the auto market in June into the off-season, dealer pressure will be further increased. On the whole, automobile sales continue to decline, market demand declines, coupled with the approach of the sixth national switch, inventory clearance pressure, automobile dealers more difficult.

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