China’s auto dealer inventory warning index stood at 62.7 percent in January this year, hitting its highest level in 11 months, only lower than 63.6 percent in February 2019 in the past year, as announced by the China Automobile Dealers Association (CADA).
Due to the Chinese New Year holiday, January was the traditional offseason for vehicle consumption as migrant workers returned to their hometowns, shrinking demand for vehicles. However, CADA stated, the outbreak of the coronavirus in late January exerted a limited impact on vehicle sales as it occurred in the offseason.
CADA forecast that vehicle sales in China in February will likely indicate a year-on-year decline as most provinces have extended their holidays due to the virus outbreak.
Moreover, CADA said only 573 4S automobile sales service shops among 2895 4S shops of 50 automobile dealer groups have returned to work as of February 11, raising the prospects of companies facing severe risks from tight liquidity.