Fuel Vehicle Inventory Exceeds 2.6 Million Units, Worsening Supply-Demand Imbalance and Squeezing Dealers

Current inventory levels in the internal combustion engine (ICE) vehicle distribution channel are severely backlogged, with dealers' inventory coefficient remaining persistently above the warning threshold of 1.5, and some joint-venture brands even exceeding the high-risk level of 2.0. Monitoring data shows that the total number of unsold new ICE vehicles stockpiled in the channel has surpassed 2.6 million units. The continuous expansion of the new energy vehicle (NEV) market share has led to a steady decline in end-market demand for ICE vehicles. Meanwhile, rigid traditional production and sales mechanisms persist—automakers continue pushing inventory onto dealers at their usual pace, despite weak retail performance, resulting in a constant influx of new vehicles into the channel. The industry generally considers an inventory coefficient between 0.8 and 1.2 as healthy; exceeding 1.5 triggers a warning signal, and surpassing 2.0 indicates a significant rise in channel liquidity risks. Currently, most ICE vehicle dealers are selling new cars at a loss and rely primarily on after-sales services to sustain operations. Their profit models remain narrow and their resilience to market shocks is limited. In the short term, automakers must adjust production plans based on actual retail data and refine dealer performance evaluation systems to alleviate inventory and cash-flow pressures. Dealers, for their part, need to enhance精细化 inventory management and accelerate the transformation of their revenue structures. In the long run, dealers should evolve into one-stop mobility service providers, focusing on niche customer segments and leveraging digital tools to boost operational efficiency. At the industry level, greater transparency and information sharing between production and sales sides are needed to reduce disorderly competition. This backlog of over 2.6 million vehicles underscores that the ICE vehicle distribution channel is undergoing profound restructuring. Simply slashing prices to clear inventory will not resolve the underlying issues. Automakers and dealers urgently need to collaborate on developing sustainable, innovative partnership models.