China's auto dealer inventory warning index drops in February 2025

According to the latest data released by the China Automobile Dealers Association, the inventory warning index of Chinese auto dealers in February 2025 was 56.9%, a year-on-year decrease of 7.2 percentage points and a month-on-month decrease of 5.4 percentage points. Although this year's trade-in policy has played a certain role in promoting the auto market, the price cuts and promotions of many manufacturers after the holiday, as well as the launch of many new cars in March, have aggravated consumers' wait-and-see sentiment. Dealers stepped up their efforts to clear inventory before the Spring Festival, and inventory pressure eased somewhat, but due to insufficient market demand in February, passenger flow and transaction rates declined. The prices of some models are seriously inverted, and dealers' sales revenue is difficult to make up for car purchase expenses. Cash flow continues to be tight, and operating risks still exist.