Shanghai (ZXZC)- China's vehicle inventory alert index (VIA), which reflects the inventory pressure on automobile dealers, rose 4.3 percentage points month on month in Mar. 2023, according to the China Automobile Dealers Association (CADA).

The VIA stood at 62.4% last month, dipping 1.2 percentage points from the previous year.

The index in Mar. 2023 was still above the official warning threshold (50%).

In March, the joint subsidy promotion by local government and automakers in Hubei province triggered a spree of cross-provincial car purchases, and dozens of provinces and cities such as Beijing, Tianjin, Shanghai, and Zhejiang followed suit with preferential policies for car shopping, said the CADA. Thus, the footfall at dealers’ stores quickly increased. However, due to consumers’ strong wait-and-see attitude, there was no significant growth in order and transaction volumes, and the recovery of automobile consumption demand was lower than expected.

Besides, the association noted the switch from the China VI A to China VI B emission standards is not the main factory leading to the price reduction trend. Most dealerships indicate that their inventories of China VI-A models are not high, and they can be cleared before the end of June.

In Mar. 2023, the VIAs of imported & luxury brands and mainstream joint-venture brands stood at 60% and 63.6%, climbing 3.5 and 6.8 percentage points over a month ago, respectively. Nonetheless, Chinese locally-owned brands’ monthly index declined 2.5 percentage points from Feb. 2023 to 62.4%.