Toyota Vios is displayed at a dealership in Ca Mau province.(Photo: VNA)The sluggish sales are attributed to a tightening credit market,higher interest rates and stagnant real estate and stock markets. Few peoplehave money to buy cars so those who are looking at this time must really have aneed and enough money.
Nguyen Van Thang, an owner of a car dealership on Le Van Luong street,said most banks do not give priority to car loans while interest rates arequite high. This factor greatly affected the car market in general and usedcars in particular, especially luxury and expensive ones.
In November, many car models saw slight increases in prices due torising input costs, logistics, and exchange rates. However, car traders had toreduce prices in early December due to sluggish sales.
Nguyen Van Nam, sale manager of a Hyundai showroom in Hanoi, saidthat in December, he lowered prices by between 15-30 million VND (625-1,250 USD)of popular Hyundai models such as Accent, Grand i10, and Elantra.
Le Thai Son, a car salesman at a Honda showroom in Cau Giay district,said the prices of many Honda models were reduced, for instance, the Honda CR-Vat this time would get an attractive discount of between 70-90 million VND.
According to a survey, most car manufacturers are offering gooddiscounts. For instance, Toyota Vietnam has offered a promotion campaign formodels such as Veloz, Vios, or the 7-seat MPV segment with discounts of between30-40 million VND. Meanwhile, many dealers also have launched promotions byoffering free registration or direct discounts on price.
No customers, no business
Despite racing to slash selling prices or launching promotioncampaigns, the local car market has remained quiet.
Tran Duc Hung, a Hanoi resident who is planning to purchase avehicle, found himself wondering whether he should opt for a new car or not. Hungsaid that if he bought a new car, he would have to borrow about 400 million VND(16,666 USD) from a commercial bank for a term of five years.
With this loan, Hung has to pay an amount of nearly 6.7 millionVND monthly, of which 4.5 million VND was interest. Once his debt was paid off,his car would end up costing an additional 130 million VND due to bankinterest.
Sale manager of a Hyundai showroom Van Nam said since the end ofthe second quarter this year, car loans from commercial banks have had aninterest rate of 13-15.5% a year, while car loans during the COVID-19 pandemicwere between 9.5-9.9% a year.
Car loans offered by foreign banks in Vietnam are between 10-11%per year, however, lending procedures are very strict, and borrowers must havehigh incomes and their salary must be paid via banks.
Nam said his showroom’s car sales have decreased by about 40% fromthe beginning of this year. His showroom set a target of selling 200 units inDecember, but it has been hard to achieve it.
Frozen used car sales
Meanwhile, used car sales have been gloomier, said Dinh Hung, acar trader. Since he started trading used cars, this has been the bleakesttime. Hung attributed his slow sales to higher interest rates and tighteningcredit. He complained that he had to borrow money from banks for his business,and it was very difficult to pay off his loans as his used cars have goneunsold. In addition, manufacturers are offering attractive discounts for newcars.
Sharing the same view, car dealer Nguyen Quyet said in the firstmonths of this year, the used car market was boisterous and many used vehicleswere even sold at higher prices than new cars due to global supply shortages.Contrary to early months, the year-end used car market is quite gloomy.Meanwhile, Quyet still has to pay salaries to his staff, rent payment and bankinterest, and sell vehicles at a loss.
November auto sales dip after four months of growth
November auto sales posted a decline from October after fourconsecutive months of growth, but sales for the year so far have still achieveddouble-digit growth.
According to the Vietnam Automobile Manufacturers Association(VAMA) report issued on December 13, automobile sales including imports weredown 5.9% year-on-year to 36,371 units in November. CKD volume reached 18,813units and CBU volume was 17,558 units.
Truong Hai Auto Corporation (Thaco) led in the period with 123,140units sold, up 38% year-on-year. This included a 51% rise in Kia sales to57,784 units, a 52% jump in Mazda volume to 33,552 units and a 68% surge inPeugeot sales to 9,725 units while Thaco truck sales fell 6% to 20,143.
The company was followed by Toyota with 81,491 units, andMitsubishi with 36,805 units. Honda and Ford rounded out the top five. Lastmonth, automaker VinFast shipped its first batch of 999 electric cars to theUS. The company expects to sell 750,000 electric vehicles annually by 2026.
Total sales in the first 11 months this year rose 43% year-on-yearto 369,334 units. Of that total, sales of CKD vehicles reached 208,822 andthose of CBU imported vehicles reached 160,512 units./.
VNA
