China auto market faces inventory pressure and sales slump as July index rises

The China Automobile Dealers Association reported that the July inventory warning index rose to 61.1%, staying above the critical threshold and signalling that the auto market remains in a downturn. Dealers are confronting high stock levels, reduced foot traffic due to extreme heat and storms, and squeezed profit margins, with only 20.5% meeting half‑year sales targets. Retail sales of passenger cars in July are projected at about 1.55 million units, while regional indices show the western region under the greatest inventory strain.

Toyota Motor Corp. saw its China sales fall 17.1% in the first half of the year to 694,700 vehicles, a drop of 143,000 units from the previous year, with June sales down 26.9% for the fifth consecutive month. Lexus imports also slipped, with June sales down 40% year‑on‑year. Overall Chinese passenger‑car retail sales fell 20.2% in the first half, reflecting weaker consumer confidence amid high fuel prices, a sluggish economy, and adverse weather conditions.