As pressure on cutting down manufacturer inventories continues to mount, reports of more and more dealers facing financial ruin continue to grow. Yan Jinghui, vice president of beiyacheshi.com, rebuffed the claims in an interview with the Beijing Youth Daily yesterday. According to Mr. Yan, although inventory stock has grown all around the board, it is within acceptable limits. "[We] have not yet reached a critical stage yet," he commented. According to beiyacheshi.com statistics, 80 percent of import dealers saw profits or broke even in the first half of this year, while 30 percent of domestic dealers suffered losses.

Chinese automobile prices have decreased 1.16 percent from last year, the China Business News reported, quoting figures from the National Development and Reform Commission's Price Monitoring Center. Among the figures reported, passenger cars saw their prices fall the most at 3.26 percent. The trend looks to continue as domestic inventories remain stocked.

Chinese prices have been less every month this year compared to 2010, with the ratios as follows: January (-0.97%), February (-1.47%), March (-1.18%), April (-1.11%), May (-1.03%) and June (1.18%). Cheng Xiaodong, head analyst for the NDRC's Price Monitoring Center, stated that market demand in first-tier, including Beijing, Shanghai and Guangzhou, was already near full, and that automobile manufacturers would need to expand to smaller cities in order to increase sales. In order to draw customers from those cities, whose salaries tend to be lower on average, manufacturers would have no choice but to revise car prices. Some in the industry believe that prices will be a total of 8 to 10 percent lower than 2010 by the end of the year.

Source: Gasgoo




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