Wholesale numbers up, but dealer inventories rising

By Marvin Zhu (China Daily)
Updated: 2010-04-24 06:53

Wholesale numbers up, but dealer inventories rising

China's light vehicle demand reached another record high in March - traditionally one of the strongest months for auto sales - up 55 percent over the same month in 2009 to 1.61 million units.

Total demand through the first quarter grew 70 percent to 4.4 million units.

One million passenger vehicles were delivered to dealers in March, up 64 percent over the same month in 2009.

The multipurpose and sports utility vehicle segments registered outstanding performance, up 89 percent and 130 percent respectively.

The mini car and subcompact segments underperformed many of the others, mostly due to the lack of new models over the last year.

Demand for light commercial vehicles increased 42 percent to 576,000 units in March due to the strong domestic economy and rising investment in infrastructure. Sales remained hot for mini buses, and particularly for pickups that showed an 80 percent rise in sales.

The sales tax stimulus proved an effective policy in shaping the structure of the automotive industry. Even with incentives now halved, demand for passenger vehicles with engine displacements of 1.6 liters or below still grew 78 percent in the first quarter of 2010, on par with the market average.

A different story

However, it is a completely different story on the retail side. Dealers almost everywhere reported a sharp fall in the number of visitors and transactions since February.

Yet new vehicles continued to roll out of manufacturers, as shown in strong wholesale volumes.

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Inventories of many brands were reported to reach 1.5 months, with some domestic brands even rising as high as 2 to 3 months. In contrast, at the end of 2009, most dealers were out of stock or had inventories of no more than two weeks.

Yet new vehicles continued to roll out of manufacturers, as shown in strong wholesale volumes.

Inventories of many brands were reported to reach 1.5 months, with some domestic brands even rising as high as 2 to 3 months. In contrast, at the end of 2009, most dealers were out of stock or had inventories of no more than 2 weeks.