Honda CRV joins Vietnam price war

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The oldest version of Honda CRV now offers a record low price in Vietnam (Illustration)

Paving the way for the new model

Mazda CX5, Innova, Kia Sorento, and Mitsubishi Outlander were heavily influenced by the declining price of Honda CRV. As reported by the newswire Dan Tri, with the new price, Honda CRV can pose a threat to the sales of Toyota Fortuner, one of the best selling cars in the first half of 2017.

According to many experienced automobile dealers, the newest Honda CRV model sold in Vietnam is the five-passenger version, not the seven-passenger model currently popular in Thailand. This model is assembled in Vietnam and it does not have significant changes compared to previous versions from 2015 or 2016.

Thus, before the discount programme, Honda CRV found it hard to compete with other models in the same segment, such as Huyndai Tucson, Volkswage Tiguan or Mazda CX5.

However, in July 2017, Honda CRV’s seven-passenger model was introduced in Ho Chi Minh City. Many people have predicted that the discount programme for the five-passenger models aims at paving the way for the new model. So far, Honda Vietnam has not released any information about these rumours.

Peddlers resort to price war

VND778-788 million ($34,232-$34,672) is a record low price for the Honda CRV, but it is not the only brand that have come out with such an attractive discount programme. Many other automobiles also follow the trend, which has created a race among automobile distributors in Vietnam.

One of the reasons for the declining price of cars in Vietnam is the discount programmes of various brands from India and Thailand, two of the largest car exporters in Vietnam. Also, many Vietnamese giants joined the race.

For example, the price of the Mazda CX5 model distributed by Truong Hai Auto decreased from over VND1 billion ($44,000) to slightly over VND840 million ($36,960).

Many of Nissan, Mitsubishi, and Suzuki’s best-selling SUVs, sedans, and hatchbacks are also on discount.

Recently, Toyota Vietnam announced that its discount programme would last for two months and would apply to the Vios and Innova models. Accordingly, when purchasing Vios and Innova models in September and October 2017, Toyota Vietnam will take care of the registration fees, which are estimated to be VND15-30 million ($660-$1,320), based on each model and edition.

Similarly, another Japanese brand Nissan also supports its customers by paying registration fees and offers an additional special promotion by gifting VND5-35 million ($220-$1,540) to its customers. Along with some other car accessory packages, in total, Nissan offeres up to VND50 million ($2,200) for each purchase.

In July 2016, the import tax on cars from the ASEAN was proposed to be reduced from 40 to 30 per cent. The policy came into effect from 2017. Nevertheless, experts widely claim that this decline in tax will not translate into a sharp decrease in prices.

Instead, these experts said that as 2018 is coming, and in accordance with the ASEAN Free Trade Area commitments, imported cars from ASEAN countries will be soon enjoying zero tax. Thus, domestic automobile distributors will have to reduce car prices. In particular, they said that from now to 2018, there would be more discount programmes for automobiles.