China's Vehicle Inventory Alert Index, which reflects the inventory pressure of automobile dealers, dropped 7 percentage points month on month in May, new data showed.

The index stood at 54 percent last month, slightly up by 0.3 percentage points from a year ago, according to the China Automobile Dealers Association.

A higher reading indicates weaker market demand, higher inventory pressure and greater risks. The index has stayed above 50 percent since the beginning of last year, the association said in a statement.

The sub-index for market demand rose from 31.9 percent in April to 41.1 percent last month, while that for average daily sales went up from 36.9 percent in April to 43.7 percent, showing recovering demand, the data showed.

The sub-index for inventory dropped from 55.3 percent in April to 50.3 percent in May, the statement added.

China's auto sales dropped 2.76 percent year on year last year and 12.12 percent in the first four months of this year, according to the China Association of Automobile Manufacturers.

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