A showroom of Hyundai An Khanh in Hanoi.(Photo: cafef.vn) The experts said the number of customers visiting car dealerships has notincreased compared to previous years.
According to a car sales staff at Toyota dealerships in the central area of Hanoi,cars priced under 1 billion VND (40,983 USD) are particularly challenging tosell. They attribute this trend to the difficult economic conditions and thereluctance of people to spend money on purchasing cars.
Anh Duc, a car salesman in Pham Hung street, expressed surprise at the lowsales, mentioning that in previous years, they could sell hundreds of cars eachmonth at this time, but recently the numbers have not been reaching even 50% ofthat.
Many dealers hope that demand for cars will increase at the end ofthe year and the market will become boisterous; however, it is so far stillquiet. In order to reduce their inventory and recover some of their costs,dealers may resort to reducing prices and offering discounts or incentives toattract buyers. In some cases, they may even have to sell cars at a loss inorder to move inventory and free up capital.
Car consumption in Vietnam has experienced a deep decline thisyear, despite various efforts to stimulate sales such as launching new models,offering discounts, and providing registration fee support and attractivegifts.
Specifically, Toyota Vietnam has initiated a programme starting from Decemberto offer a 50% discount on registration fees for certain car models. Inaddition to this discount, there is also a 50% reduction in registration feesfor domestically assembled cars as part of the general policy. This policy willbe in effect until the end of 2023.
Honda Vietnam has also announced a 50% registration fee discount programme forall car models on sale starting from December 5. Additionally,domestically-produced and assembled vehicles are still receiving 50%registration fee support from the Government.
As for Hyundai, the Hyundai Stargazer model had a listed price of 575-685million VND (23,565-28,073 USD). In November, the price was reduced by 120-130million VND, but it still faced difficulties in selling. In December, the pricewas further cut by another 10 million VND. Furthermore, the high-end dieselversion of the SantaFe model, which was produced in 2022, is being reduced by 210million VND.
The decrease in car purchasing power compared to the same period in 2022 is aconcerning trend, especially considering that car sales were lower than duringthe period when the market was affected by the COVID-19 pandemic.
The statistics from the Vietnam Automobile Manufacturers Association (VAMA)indicate a significant decline in car sales, with a 29% decrease in the firstten months of 2023 compared to the same period last year, equivalent to the absolutenumber of 70,000 vehicles.
Among the car manufacturers, Toyota Vietnam seems to be the most affected, witha 42% decrease in sales during the first ten months of 2023, amounting tonearly 30,300 vehicles. Other brands like Kia, Honda, and Mitsubishi alsoexperienced significant declines, with decreases of 39%, 36%, and 28%,respectively.
Hyundai is another car company facing challenges, with a sales decrease ofapproximately 25%, equivalent to more than 16,000 vehicles. These figuressuggest that the automotive market in Vietnam is currently facing obstacles anduncertainties.
Economist Ngo Tri Long said that the selling prices of many car models havereached their lowest level in nearly ten years in 2023.
Some businesses and dealers may have hinted at cutting incentives at the end ofthe year due to anticipated increased demand; however, car discount promotionsare still prevalent and becoming even deeper.
The difficulties are expected to continue into 2024. High inventory levelscan also be a challenge for auto businesses. If consumer demand is lower thanexpected, dealerships and manufacturers may face excess inventory, which canlead to increased costs and reduced profitability, according to industry insiders./.
VNA
