A danger zone for China's auto inventories?

BEIJING, Aug. 27 (Xinhua) -- China's automakers have seen high automobile inventories over the past six months, prompting many to worry whether the country's car industry is facing a crisis.

According to information published online earlier this month by the China Automobile Dealers Association (CADA), the comprehensive inventory index of automobile dealers reached 1.98 in June, up from 1.88 in May.

According to international auto industry practices, a normal inventory index should stay between 0.8 and 1.2, with 1.5 as the warning level. The monthly indices of the first half of this year, except January, have all surpassed 1.5, the CADA said.

Statistics from the China Association of Automobile Manufacturers (CAAM) show that the industrial inventory of domestic automakers stood at 736,300 units by the end of July, up by 47,700 units month on month.

Industrial insiders said the industrial and commercial inventories of domestic automakers are currently at about 2.5 million units.

China's auto industry has expanded into a pillar of the national economy during the past decade, and the sector witnessed explosive development from 2008 to 2011.

News we recommend: Amusement parks boost real estate market Survey shows SOE jobs are top choice CNOOC pushes ahead with Nexen acquisition The Pain of a Pension Deficit Staying on Target More new grads opt for State firms Treading Lightly for Fast Growth  Questions raised over stores' price war A fertile ground for overseas banks