Honda CR-V - A major shock to the Vietnamese car market at the end of the year.

The Honda CR-V, CR-V, and CR-V is a name that has caused more of a stir than any other car recently, even more so than the arrival of the unique Pagani Huayra worth nearly 100 billion VND in Vietnam or Vingroup's car manufacturing, because it not only shocked people with its price but also opened up many other stories…

Honda CR-V unexpectedly drops its price by hundreds of millions of VND.

Honda's aggressive price-cutting campaign to clear inventory and make way for the new CR-V seems to have ended, as prices at many dealerships have risen again. However, the drastic price drop for the CR-V has had a somewhat negative impact on the Vietnamese car market as a whole.

Used cars are a disaster.

The annual price reduction for new cars first affects used cars. Used cars are usually priced based on new car prices; if used cars are more expensive than new ones, who would buy them? Yet, this happens in Vietnam. Looking around the used car markets, it's surprising to find that the price of a 2015-2016 CR-V 2.0 version is still around 750-800 million VND, while the 2.4 version costs from 810 to over 900 million VND.

This price is even considerably higher than a brand-new CR-V at dealerships. The reason used car listings remain high is mainly because the price of new cars has dropped so drastically, by hundreds of millions of dong, that used car owners are caught off guard, and the rest are too discouraged to sell. It can be said that the drastic price drop of the CR-V has significantly impacted the used car market and the psychology of new car buyers, as they can lose hundreds of millions of dong in just a few days or even hours.

"The whole family is selling the car."

Consumers' reluctance to wait for better prices, coupled with competitors' aggressive price reductions, has led to high inventory levels for many vehicles, including the CR-V. This has forced Honda to mobilize all available resources to sell the cars, including dealerships that sell... motorcycles. Honda's action is seen as a clearance campaign to make way for a new model, but clearly, using motorcycle dealerships is unprecedented for other businesses.

Accordingly, not only did Honda launch an unprecedented promotional program offering a free SH125i with the purchase of a premium CR-V, but it also gave the green light to motorcycle dealerships to sell the CR-V, offering better prices than car dealerships for directors, investors, store managers, and even customers referred by the dealerships. Although there is information that the number of vehicles sold through dealerships will be limited, with hundreds of dealerships nationwide, this is still not a small number.

Continue waiting.

The Vietnamese car market has been in a wait-and-see mode since the beginning of the year, anticipating 2018 and further price drops. This has become a vicious cycle where sellers want to sell their cars and buyers want to buy at the best prices, resulting in a circular chase where prices continue to fall and consumers remain indifferent. This is because, on numerous occasions, many car models that seemed to have hit rock bottom and couldn't fall any further have unexpectedly seen price reductions of tens of millions of dong.

And the CR-V is a prime example; it gives consumers more motivation to…wait because the price reductions seem to never end. Although the current CR-V price is considered very good, with many orders following the price cuts that have led some dealerships to slightly increase prices, Honda's all-out approach is forcing competitors in the segment to continue lowering prices if they don't want to accumulate inventory.

Because, at least in the mid-size crossover segment, competition has long ceased to be about reputation or features, but rather about price.

According to TNO