The China Automobile Dealers Association has received a large number of member companies' feedback on the drastic changes in the auto market caused by ongoing factors such as a 'price war', leading to car dealers being deeply mired and facing a prominent issue of extremely tight liquidity. Based on this, the association formally submitted an 'Urgent Report on the Current Financial Difficulties Faced by Auto Dealers and Risks of Closure' to relevant government departments to provide effective basis for decision-making.

The 'Report' points out that current new car sales by auto dealers are experiencing widespread losses, with a general situation of operating in cash flow deficit and intensified risks of fund chain rupture, making it difficult to escape the predicament of survival. The two main issues faced at the current stage are:

One is that consumer sluggishness and dual pressures from factory wholesale volumes have kept dealer inventory at high levels, forcing dealers to sell at low prices to reduce financial pressure and financing costs in order to survive.

The second issue is that the 'price war' has severely caused a scenario where the more dealers sell, the more losses they incur, while also facing pressure from financing maturity and difficulty in fulfillment, leading to a flow disruption in repayment for dealers, and a sharp increase in the risk of fund chain rupture. At present, the dealers' existing liquid funds maintenance period has been compressed to the limit.

According to relevant data analysis by association experts, from January to August this year, the 'price war' has led to a cumulative retail loss of 138 billion yuan in the overall new car market, significantly impacting the healthy development of the industry.