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Strong Expectations & Weak Reality


On the afternoon of Thursday, March 30th 2023 the China Automobile Distribution Association organized a symposium on the “China VIB Switchover ” for some automobile OEMs. The most stringent emission standard in history, China VIB, will be officially implemented on July 1st. Vehicle manufacturers and trade circulation enterprises are facing the problem of destocking. This meeting revealed that there are currently about 2 million non-RDE vehicles in China VIB inventory that have not been digested.




















Suggestions for participating enterprises:

The switch to the production end will be strictly implemented in accordance with the policy document, and the production of vehicles that do not meet the emission standards will be completely stopped before June 30 this year; For the vehicles that enter the circulation end and are produced before June 30, it will not have an incremental impact on environmental protection, and in order to avoid a large amount of waste loss, it is recommended that the state give a sales transition period of 6~12 months, so as to facilitate the stability of the automobile market, the business transition of industry enterprises and the perfect implementation of environmental protection policies.

Reply from China Automobile Distribution Association:

We will quickly summarize the issues raised by various enterprises and submit them to relevant government departments to promote the healthy and stable development of the industry.

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Due to the official implementation of the emission standard China VIB on July 1st, vehicle manufacturers and trade circulation enterprises are facing the problem of destocking, and manufacturers are under great pressure to reduce prices and promote sales. From destocking to upstream die-casting, it has a direct impact on aluminum alloys. According to feedback from some large domestic smelters, vehicle factories have reduced production capacity and have notified die-casting component suppliers to suspend or reduce supply. Die-casting factories have reduced the use of aluminum water and aluminum alloys, and some large smelters have reduced production by 20% to cooperate with downstream inventory reduction.






















After three years of experiencing the epidemic, the industry had generally had strong expectations for March to April (the traditional peak season of the die-casting industry), believing that the operating rate of die-casting enterprises would significantly increase starting from March, driving demand for aluminum alloys. Today is the last day of March, and expectations have basically fallen through. The operating rate of die-casting factories has not changed much, with low sales of aluminum alloys and fluctuating prices. Die-casting factories just need to purchase.





According to past experience, the destocking of car companies has led to sluggish upstream and downstream demand, which may take some time to digest. After the two sessions, the country’s policy of stabilizing the economy and promoting development and promoting consumption was intensively introduced, and colleagues in the industry still have expectations for this year’s Aluminum market, hoping to speed up the speed of vehicle destocking, alleviate the problem of low operating rate of die-casting plants, and promote the healthy and balanced development of the industry.

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