China Automobile Dealers Association: The inventory warning index for car dealers in August was 62.3% above the boom and dry line

The Zhitong Finance App learned that on August 31, 2026, the latest “Vehicle Inventory Alert Index Survey” VIA (Vehicle Inventory Alert Index) released by the China Automobile Dealers Association showed that in August 2026, the car dealer inventory warning index was 62.3%, up 5.3 percentage points year on year, up 1.2 percentage points from month to month, and the inventory warning index was above the boom and bust line.

In August, the car market showed a trend of previous lows and backwards. Early performance was weak due to high temperature holidays and typhoon rainfall. In the middle of the month, demand was suppressed and passenger flow improved, terminal passenger flow improved. In late Chengdu, car sales were centralized, and local subsidies were underpinned, and market popularity picked up slightly. However, compared with the same period last year, the overall market still showed a downward trend. Adverse effects such as traditional off-season and extreme weather continued, and the price war also increased consumers' wait-and-see sentiment about holding coins.

According to the survey, new car purchase subsidies were introduced in some regions in August, but the subsidies were limited, and the leveraging effect on terminal transactions was weak. Judging from the driving effect, only 12.9% of dealers think “the driving effect is obvious”, 37.6% think “there is a certain drive but the extent is limited”, and “there is no new subsidy policy in the region” and “almost no driving” together account for 31.2%. Judging from the nature of the impact, 32.3% of dealers believe that the subsidy “mainly has a positive effect”, and 28.0% believe that it “drives transactions in the short term but interferes with the pace of the market.” Judging comprehensively, the release of compensatory demand, the warm-up of auto shows, and policy support drove a phased recovery in the market in August, but demand for terminals is still weak. The retail volume of passenger car terminals is expected to be around 1.6 million units in August.

Currently, the core dilemma of dealers is that the sales price of new cars is seriously inverted, bicycle losses are increasing, and the capital chain continues to be tight; in addition, manufacturers continue to be compressed and terminal passenger flow is declining, and dealers have fallen into a business dilemma where “incremental increases do not increase profits, and concessions are difficult to exchange”, and channel operation risks have clearly increased.

Looking at the sub-index situation: inventory, market demand, and average daily sales sub-indices all increased month-on-month, while the employee and operating conditions sub-indices declined. Dealers' inventory pressure increased in August, and demand in the terminal market improved slightly compared to the previous month, but dealer business conditions deteriorated further from month to month.

Looking at the regional index situation: in August, the overall national index was 62.3%, the northern index was 59.5%, the eastern index was 61.8%, the western index was 67.6%, and the southern index was 66.0%. Affected by a combination of factors such as typhoons, heavy rainfall, and Chinese Yuan Festival folklore, consumers in the southern region delayed their car purchase decisions, leading to an increase in the regional inventory index.

Looking at the index by brand type: The indices for luxury, imports, mainstream joint ventures, and independent brands all rose month-on-month in August.

Judging the market for next month: Driven by multiple factors such as the release of compensatory consumer demand, concentrated new car launches, and traditional peak sales season expectations, the automobile market is expected to recover moderately in September. However, demand for terminals is insufficient, and the industry price war continues to ferment. Combined with the high base for the same period last year, the market's year-on-year performance is still under pressure. Judging from the survey results, in response to the market trend from September to October, 49.5% of dealers predicted a “slight improvement and gentle recovery”, 30.1% thought it would basically maintain the August operating level, 9.7% expected a “significant increase and significant recovery,” while another 10.7% held other views.

The China Automobile Dealers Association suggests that dealers should rationally estimate actual market demand according to the actual situation. At the same time, it is necessary to increase “publicity on trade-in and scrapping renewal policies”, boost consumer confidence by strengthening services, put cost reduction and efficiency first, and prevent business risks.