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A danger zone for China's auto inventories?   2012-08-29 08:19:00
China's automakers have seen high automobile inventories over the past six months, prompting many to worry whether the country's car industry is facing a crisis.

According to information published online earlier this month by the China Automobile Dealers Association (CADA), the comprehensive inventory index of automobile dealers reached 1.98 in June, up from 1.88 in May.

According to international auto industry practices, a normal inventory index should stay between 0.8 and 1.2, with 1.5 as the warning level. The monthly indices of the first half of this year, except January, have all surpassed 1.5, the CADA said.

Statistics from the China Association of Automobile Manufacturers (CAAM) show that the industrial inventory of domestic automakers stood at 736,300 units by the end of July, up by 47,700 units month on month.

Industrial insiders said the industrial and commercial inventories of domestic automakers are currently at about 2.5 million units.

China's auto industry has expanded into a pillar of the national economy during the past decade, and the sector witnessed explosive development from 2008 to 2011.

Zhang Haoju, a senior car dealer, said the industry recorded annual growth of over 30 percent from 2009 to 2011, and the annual growth in the luxury vehicle market reached 40 percent during the same period, leading some of the world's auto giants to move their production lines to China.

However, the industry has been undergoing a slowdown since the second half of 2011, and many brands have seen dwindling sales, Zhang said.
source : People's Daily Online     editor:: tina
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