Auto prices fall due to low demand

Vietnamese auto firms have launched promotions to spur car sales after low demand following the Tet (Lunar New Year) holiday and a strong increase in the number of imported cars. - VNA/VNS photo

Le Viet Tan, a sales agent at a car dealership in Go Vap District, said the drop occurred partly due to a sharp increase in demand for vehicles before the Tet holiday.

To increase sales, the domestic automaker Thaco has reduced prices of its models by between VND20 million (US$870) and VND140 million (US$6,087) each.

Toyota Viet Nam, which has a big market share, has also applied discounts of between VND20 million and VND40 million and gifts worth VND10 million to VND15 million.

Automobile sales by member firms in the Vietnam Automobile Manufacturer Association (VAMA) in February declined 61 per cent from the previous month, the sharpest month-on-month fall ever recorded.

The association reported that its members sold only 13,143 vehicles in February.

The sharpest drop was seen in sales of passenger cars (67 per cent to only 9,157 vehicles) followed by special-use vehicles (47 per cent to 176 vehicles) and commercial vehicles (34 per cent to 3,810 vehicles).

Besides low demand after Tet, the number of imported cars increased again after several months of falling as the Vietnamese Government issued Decree 116 in October 2017.

The decree stipulates conditions for production, assembly, import and business of automobile warranty and maintenance services, which auto importers in Viet Nam deem as obstacles, especially the regulation requiring a Vehicle Type Approval (VTA) Certificate to be issued by the exporting country.

The number of imported cars in the first four months was 52,000, worth US$ 1.139 billion, up by 778 per cent of the number of cars and an increase of 637 per cent of worth compared with the same period last year.

However, the sales figures do not reflect the country’s entire automobile market as they do not include sales of other manufacturers that are not VAMA members.

Hyundai Thanh Cong, a non-member of VAMA, sold 3,924 vehicles of all kinds. Huyndai was the most successful firm in February, pushing Toyota to second place with 2,300 vehicles sold.

In the first two months of 2019, VAMA members sold 46,653 vehicles of all kinds, up 21 per cent year on year, along with 10,731 vehicles sold by Hyundai Thanh Cong.