![China's new car dealers are facing pressure from inventory build-up and declining sales, causing discrepancies with producers. [File Photo]](http://www.ecns.cn/cns-wire/2013/06-09/U472P886T1D67931F12DT20130609141213.jpg)
China's new car dealers are facing pressure from inventory build-up and declining sales, causing discrepancies with producers. [File Photo]
(ECNS) -- China's new car dealers are facing pressure from inventory build-up and declining sales, causing discrepancies with producers, according to the China Automobile Dealers Association.
The problem can be seen in the inventory coefficient: the ratio of inventory quantity to sales per month, the association said.
The inventory coefficient of domestic auto dealers in April increased by 1.3 percent to 2.44, which shows that available stock is much larger than desired, the association said, adding that the inventory coefficient of foreign brand dealers declined to 2.17, which is also still too high.
The stock of automobiles by joint ventures had a lower ratio at 1.45, which is within reason, the association added.
A dealer of Korean cars told reporters that his producer hadn't agreed to lower prices to boost consumption or lower sales targets. In such cases, cash is often tied up in slow moving stock, he added.
The number of automobile dealers in China has increased to 20,000, creating serious competition and decreasing profits, according to one research report.
A manager of a Shandong mobile sales company said discrepancies between dealers and producers is natural in a tepid market.
