Car dealers face tight inventory pressure
Suzhou Johnson Automation Technology Co., Ltd. , https://www.cn-johnson.com
October 04 11:14:42, 2025
As inventory levels continue to rise and market demand remains weak, automakers are turning to various strategies to stimulate sales. Recently, an auto dealer disclosed to reporters that the company currently holds over 100 vehicles in stock—equivalent to six months' worth of sales. With increased production capacity and a declining market, many domestic manufacturers and dealers have felt significant pressure to meet year-end targets. Price reductions have become a hot topic in the auto industry, with more than 20 domestic car models cutting prices starting from August 20th.
This trend is different from previous years, as this time, even popular models are being discounted. For example, the mid-to-high-grade Passat used to require long waiting periods for purchase at the start of the year. However, just 10 days ago, its price was reduced by 20,000 yuan under the distributor's leadership. Similarly, Toyota’s domestically produced models, such as the Vios, which once saw long queues, are now facing price cuts. In September, Toyota officially announced a 5,000 yuan reduction for both Corolla and Vios models.
After several rounds of price cuts, the average price of mainstream economy cars has dropped below 60,000 yuan, mid-range cars hover around 100,000 yuan, and mid-to-high-end models are approaching 200,000 yuan. “We’ve noticed that price cuts may not be enough to revive the auto market, but they encourage consumers to wait and see,†one dealer said. After a round of price reductions in April, the market remained sluggish, leaving dealers puzzled.
Starting in September, dealers began using more subtle methods to reduce prices. For instance, Dongfeng Citroen offered consumers up to 500,000 yuan in third-party liability insurance, effectively equivalent to a 1,000-yuan discount. General Union Yongda also announced a buyback program for used cars at 65% of the current transaction price after three years. Facing inventory pressures, selling this year’s stock before the end of the year has become crucial for many manufacturers, especially those still struggling with last year’s excess inventory.
In the middle of the year, some employees of Shanghai Volkswagen started selling concessionary cars directly to the public, offering a 20% discount. This led many consumers to turn to the underground market. An auto dealer recently told reporters: “I just helped a Volkswagen employee sell a Polo. The next customer got a foreign license plate. These vehicles were from 2003, but the price is only about 80,000 yuan.â€
Domestic dealers are increasingly dealing with surplus inventory. According to data released by the SASAC, 13 key state-owned automotive enterprises, including FAW Group, SAIC Group, and Dongfeng Group, achieved a total industrial output value of 242.34 billion yuan from January to July. Production growth slowed by 2.4% compared to the first half of the year, while sales growth dropped by 5.6%. As a result, the production and sales rate for these 13 companies was only 6.5%, down 3.7 percentage points year-on-year.
Although overall production and sales of domestic automobiles still showed growth in the first seven months, sales growth in July fell to 1.35%, the lowest in two years. With production far outpacing sales, inventory continues to accumulate, signaling a challenging period ahead for the auto industry.