Gasgoo Munich- The China Automobile Dealers Association (CADA) released data on February 28 showing the inventory warning index for China’s auto dealers stood at 56.2% in February 2026. While that represents a decline of 0.7 percentage points year-on-year and 3.2 points from the previous month, the figure remains above the critical 50% threshold—signaling that operational pressure persists across the industry.
Image Source: China Automobile Dealers Association (same below)
According to the association’s analysis, the Lunar New Year holiday weighed heavily on terminal retail in February. With fewer effective selling days and a sharp drop in store footfall—compounded by adjustments to new-energy vehicle purchase tax policies and consumer anticipation of spring auto show discounts—cautious sentiment deepened. As a result, 76.8% of dealers reported missing their sales targets for the month. However, the implementation of the Compliance Guidelines for Price Behavior in the Automotive Industry has helped alleviate price inversions, where vehicles are sold below cost. Notably, 25.6% of dealers indicated this situation had eased, while 20.7% reported improved profitability.
Breaking down the sub-indices: dealers intensified pre-holiday destocking efforts and tightened purchasing rhythms, causing the inventory sub-index to fall month-on-month and easing some pressure on stockpiles. Conversely, indices for market demand, average daily sales, and staffing all rose.
