Unprecedented in the auto market: Stagnation waiting for new changes

Not only popular cars, but also luxury cars imported from Europe, Japan,... are also getting their prices slashed. The whole market is almost stagnant waiting for new changes.This further reinforces the view that car prices will continue to decrease from now until the end of 2017. With continuous price reductions, in addition to waiting for further price reductions, consumers also feel confused.

Massive discounts but still slow sales

According to the report of the Vietnam Automobile Manufacturers Association (VAMA), the total sales of the market in September 2017 reached 21,216 vehicles, down 20% compared to the same period last year. Of which, passenger cars decreased by 7%, commercial vehicles decreased by 7% and specialized vehicles decreased by 18% compared to the same period.

Compared to August 2017, total market sales decreased by 4%, of which passenger car sales decreased by 7%; commercial vehicles remained unchanged and specialized vehicles increased by 4% compared to the previous month.

In the first 9 months of the year, total sales of the entire market only reached 198,253 vehicles, down 8% compared to the same period in 2016.

Many car models on the market are discounted.

The two leading companies in the Vietnamese automobile market saw the sharpest decline in September. Toyota Vietnam's sales reached 4,109 vehicles, down sharply from 5,794 in August and down from 5,110 in September 2016. Truong Hai's sales reached 5,640 vehicles, down from 6,228 in the previous month and down sharply from 10,104 in the same period in 2016.

Ford Vietnam saw a slight decrease in sales with 2,271 vehicles compared to 2,292 vehicles last month and a decrease of nearly 400 vehicles compared to September 2016. Mitsubishi and Suzuki also saw a decrease in sales compared to both the previous month and the same period in 2016. The market recorded strong growth for Honda Vietnam with 2,073 vehicles sold, twice as high as the same period in 2016 and an increase of more than 1,000 vehicles compared to August 2017, thanks to a sharp increase in sales of the CR-V model of more than 1,300 vehicles.

Considering the first 9 months of 2017, Truong Hai Company had the sharpest decline, with sales reaching 66,596 vehicles of all types, down 16,023 vehicles (-19%) compared to the first 9 months of 2016.

Meanwhile, Toyota, Honda, Ford, GM Vietnam still have growth. Toyota increased by 12%, Honda increased by 28%, GM increased by 19% and Ford increased by 1%, compared to the first 9 months of 2016,...

Businesses said that because September 2017 had 20 days coinciding with the ghost month, the automobile market declined quite sharply. However, in the passenger car segment, although businesses continuously slashed prices, launched huge promotional programs, and the prices of many car models were reduced by hundreds of millions of dong for many consecutive months, sales did not meet expectations. Therefore, many opinions said that from now until the end of 2017, the automobile market will continue to face difficulties.

Psychological panic

An auto company said they were concerned that the market would continue to decline further. In addition to the wait-and-see mentality of customers, an important factor leading to the sharp decline in the market was that consumers felt confused by the recent consecutive price cuts. This created a gloomy picture, covering the auto market before 2018.

Entering October, in order to attract buyers, many auto companies have again drastically reduced prices from tens to hundreds of millions of dong on some car models. Not only popular cars, but even luxury cars imported from Europe, Japan, etc. have also joined in the price reduction. This is an unprecedented phenomenon in the auto business at the end of the year. This further reinforces the view that car prices from now until the end of 2017 will continue to decrease.

Many customers are waiting for further price reduction.

In 2018, special consumption tax will be reduced to 35% for cars with cylinder capacity of 1.5L or less; reduced to 40% for cars from 1.5L to 2.0L. Meanwhile, import tax rate for completely built-up cars from ASEAN will be reduced to 0%.

For domestically assembled vehicles, the authorities are considering reducing the import tax rate on components from the current 15% to 7%, or even 0%. With these changes, consumers are expecting a “whirlwind” of price reductions in 2018.

Meanwhile, current car prices are calculated based on import tax and special consumption tax that have not been reduced. Therefore, to welcome the new year 2018, businesses will have to “quickly process” the remaining imported and domestically assembled cars. Therefore, car prices will continue to decrease, that is the opinion of many consumers today.

Not only that, all expectations are on new products that will appear early next year. Dozens of new car models, especially small, cheap cars imported from the ASEAN region are about to arrive in the country, making customers even more determined to wait.

This will force car manufacturers to further reduce prices to push sales, as there is no other way. When old cars are still available and new cars are about to arrive at a new price level./.

According to VNN