Shanghai (ZXZC)- China's vehicle inventory alert index ("VIA"), which reflects the inventory pressure on automobile dealers, rose 2.1 percentage points year on year in July 2022, according to the China Automobile Dealers Association (CADA).

The VIA stood at 54.4% last month, growing 4.9 percentage points from the previous month.

The index in July was above the official warning threshold (50%).

The CADA said the car market had been greatly vitalized by the implementation of car purchase tax reduction starting from June. Besides, automakers and car dealers stepped up sales promotion in late June to fulfill their semi-annual sales targets, remarkably driving the car sales in June up both year on year and month on month, but to some extent overdrawing the market demands in July.

The association also noted the passenger vehicle sales in July would be lower than expected due to such factors as summer heat, off-season, the epidemic impact, as well as the termination of car shopping incentives by the end of June in some regions.

In July, the VIAs of imported & luxury brands, mainstream joint-venture brands, and Chinese indigenous brands reached 52.7%, 55.1%, and 54%, growing 7.9, 4.1, and 0.6 percentage points over a month ago, respectively, according to CADA’s data.