The Vietnam Automobile Manufacturers' Association (VAMA) announced on Feb. 17 that its members sold 10,424 units in the first month of this year, a month-on-month decrease of 17 percent.

Of this figure, the volume of commercial vehicles decreased by 34 percent over the previous month to 3,581 units.

Sharing the same down turn, only 2,774 multi-purpose, sports-utility and cross-over vehicles were sold, a month-on-month decrease of 7 percent.

"In my opinion, the current situation is rather difficult," said Nguyen Trung Hieu, a VAMA official.

Hieu said sales last month were down for a number of reasons.

"Normally, demand for disbursement increases at the year-end. Because of this, many agencies and companies decided to purchase automobiles, leading to increased demand in December," Hieu explained.

However, Hieu said the highest demand came from private consumers.

"In December, a large number of private consumers purchased vehicles to use during Tet. Many of them were influenced by rumours that registration fees would increase to 20 percent in January," he added.

Although auto sales in January were down over the previous month, they increased by 48 percent over January 2010 when only 7,043 units were sold.

"January 2010 was a special time for the domestic auto market because the Government ended tax subsidies and as a result, demand dropped strongly," Hieu said.

Hieu predicted that demand would increase in the coming months.

"Some auto companies have recently announced they will be increasing prices following the devaluation of the Vietnamese dong. However, this will only affect newly imported vehicles," Hieu said, adding that "because of this, I guess that consumers will want to take advantage of the current low prices."

He added that demand was likely to drop when the new fees were introduced.

In January, Vietnam imported over 6,000 automobiles, nearly twice as many as the same month last year. /.