June’s auto sales continue to dip: VAMA

Small car sales reached 5,482 units, down 3.8 per cent month on month, and lorry sales reached 3,176 units, down 5.4 per cent.

The locally assembled car volume reached 5,482 units, rising 3 per cent from the previous month, while imported cars dropped 30 per cent month-on-month to reach about 1,000 units.

VAMA’s members sold 5,858 units in June, inching up 2 per cent month-on-month, mainly thanks to small car sales with a 14 per cent month-on-month rise.

However, car sales of VAMA’s members in June still plunged 24 per cent year on year.

In the first half of this year, car sales for the whole market reached 42,928 units, down 41 per cent year-on-year, of which, small car sales declined 47 per cent while truck sales dipped 30 per cent.

VAMA also forecasted car sales this year at only 80,000 units, dropping sharply against the sales of more than 110,000 units in 2011.

Vietnamese carmaker Truong Hai and Toyota lead domestic sales among 18 manufacturers in the country.

Timely lifebuoys

The Ministry of Transport last Friday sent a document to VAMA in reply to a VAMA document dating back to May. The document proposed a meeting with the ministry to iron out the difficulties facing local automakers.

Document No. 5299/BGTVT-TC said it would be several more years before the imposition of a fee aimed at limiting personal vehicles and cutting down on traffic congestion would be possible.

The ministry should consult specialists and public opinion in order to make comprehensive policies that are feasible and able to be legislated, said the document.

The collection fee will only be possible when it has the consensus of people, it said.

VAMA said it considers the document a positive indication from the Government and the Ministry of Transport on tackling the issue.

The association had said earlier it had sought government approval to quash the plan for imposing such a fee, which had affected car sales.

Late last month VAMA said in a letter sent to the press that the bank loan interest rate reductions have offered lifebuoys to automobile manufacturers, who have been in distress because of slow sales.

VAMA lauded the new decision by the State Bank of Vietnam to slash the ceiling deposit interest rate for dong to 9 percent per annum, which would indirectly lead to a lending interest rate reduction.

This means that the clients a healthy financial situation would be able to access bank loans at the interest rates of 12-13 per cent, which are much lower than the 20-22 per cent rates seen earlier this year.

The interest rate reduction has arrived in the nick of time, as automobile manufacturers were feeling disappointed with the slow sales caused by the increasing taxes and fees.

In May 2012 VAMA’s members sold 6,780 cars, a 32 per cent year-on-year and a 2 per cent month-on-month decrease.

Poor sales data showed that despite the many measures applied to stimulate demand, including price discounts and promotions, purchasing power remains very weak.

Many people have canceled their plan to buy cars in these hard times, especially when higher car ownership registration taxes and other kinds of taxes have been imposed on car owners, said VAMA.

Slow auto sales have led to a sharp fall in tax collection to the state budget of VND6 trillion in the first four months of the year.