What happens if car prices fall across the board?

When car prices fall, everyone can own a car. Cities will be overcrowded and have serious traffic jams and lack of parking. However, cars will help develop satellite cities.

The year 2018 is also the time when many laws and decrees related to the automobile market come into effect. Users expect that with positive changes, car prices in Vietnam will be cheaper, and many people will have the opportunity to buy cars. So what will happen if car prices decrease simultaneously, and the number of cars increases suddenly?

Cars can't 'move' in big cities

According to Solidiance, the car ownership rate of Vietnamese people is currently 16 cars/1,000 people. This figure is much lower than that of Malaysia (341 cars/1,000 people), Thailand (196 cars/1,000 people) and Indonesia (55 cars/1,000 people).

Most cars are registered in large cities. Hanoi and Ho Chi Minh City alone account for 45% of new car registrations each year.

Although car ownership rates are among the lowest in the region, traffic congestion in Hanoi and Ho Chi Minh City remains severe.

The number of cars is growing so rapidly that traffic jams are getting worse.

According to the British economic newspaper, Economist, only 9% of the land in the center of Hanoi is used for main and secondary roads, compared to 32% in Manhattan (New York, USA). The World Bank calculated in 2011 that if the number of cars reached a moderate level like in Malaysia, the entire capital Hanoi would be paralyzed and unable to move.

In Ho Chi Minh City, the traffic land ratio is only around 8%, reaching 30% compared to actual demand.

Thus, the need for Vietnamese people to own cars is completely legitimate, but if prices drop so low that everyone can afford to own a car, traffic congestion will become a difficult problem for policy makers.

According to market research firm Audience Project,On average, a car owner in Hanoi spends 58 minutes a day and 51 minutes in Ho Chi Minh City to avoid traffic jams.

Lack of parking

In addition to traffic problems, finding a parking space in big cities is also a difficult problem. According to a survey by Audience Project, 49% of car owners in Hanoi and 53% in Ho Chi Minh City are considering whether to use a car anymore because of the inconveniences caused by this means of transport.

In addition to traffic jams, the main reason for this situation is not being able to find a parking space. In Hanoi, 77% of respondents said they often missed important events because they struggled to find a parking space, while the corresponding figure in Ho Chi Minh City was 68%.

In both cities, the average time it took individuals to find a parking space was 45 minutes. More than half of respondents said they would not use their cars unless it was absolutely necessary.

Owning a car is a legitimate need of people to ensure health and safety, however, the disadvantages in the process of use are the biggest barrier that makes many Vietnamese people hesitate when buying a car.

Development of satellite urban areas

Besides the disadvantages that cars bring, developing a strong automobile market and increasing the car ownership rate of Vietnamese people also brings many positive effects. The first is contributing to the decentralization of population from urban centers.

When everyone can own a car, people can live far from the center, work in satellite cities, even hundreds of kilometers away from the center.

For example, in the US, low-income people often live in the suburbs but commute to the city center for work. Dispersing the population from the city center will cool the real estate market in the city center and stabilize land prices.

For example, in Ho Chi Minh City, if cars become a popular means of transportation, people can live in Dong Nai, Binh Duong or Cu Chi, Long An but still easily work in the center.

Many people own cars, contributing to the depopulation of urban centers.

For example, a person living in the Long Thanh - Dau Giay area only takes about 45 minutes to travel to the central area, and return home at the end of the day. When the pressure in the urban core is reduced, the state will have more land to develop infrastructure, stimulating the development of the super urban model.

For example, in Malaysia, due to the heavy traffic in Kuala Lumpur, the government established a new city called Putrajaya, 30 km from the center of the capital. Putrajaya residents can still go to work in Kuala Lumpur every day and return home in the evening.

However, to do this, traffic connections between the center and satellite cities must be completed, including highway systems and public transport.

Owning a car is a necessary and inevitable need if the country wants to develop in a modern direction. The prospects of reducing car prices in 2018 are feasible. Besides the immediate consequences, developing a healthy car market, bringing cars back to their real value is believed to contribute to improving people's lives and developing the country in the long term.

According to Zing