Economic recovery, car purchasing power expected to increase in the last months of the year

Car sales down 1/3 compared to 2022

According to a report from the Vietnam Automobile Manufacturers Association (VAMA), by the end of June 2023, total market sales reached 137,327 vehicles, down 32% compared to 2022, of which passenger cars decreased by 37%; commercial vehicles decreased by 11% and specialized vehicles decreased by 65% ​​compared to 2022.

Similarly, sales of domestically assembled cars fell 37% while imported cars fell 25% year-on-year in the first half of the year.

Thus, car sales are unlikely to reach this year's target as sales fell by one-third in the first half of the year.

Entering June, the market recorded positive signals thanks to the effect of the 50% reduction in registration fees and incentives from car manufacturers to stimulate demand.

According to a report from VAMA, in June 2023, sales of the entire market reached 23,800 vehicles, an increase of 15% compared to May 2023 and a decrease of 5% compared to June 2022.

This sales volume includes: 17,334 passenger cars; 6,344 commercial vehicles and 122 specialized vehicles. Compared to the previous month, passenger car sales increased by 20%; commercial vehicles increased by 4% and specialized vehicles decreased by 17%.

In terms of origin, sales of domestically assembled cars reached 15,488 vehicles, up 28% over the previous month, and sales of imported cars were 8,312 vehicles, down 4% over the previous month.

Also in June, many car buyers took advantage of the opportunity to buy in advance and complete the paperwork in July to enjoy the double incentive of a 50% reduction in registration fees from the Government and still having the incentive of a 50% - 100% reduction in registration fees from car manufacturers.

In June, most manufacturers saw growth in sales. Thaco remained the manufacturer with the largest market share in the Vietnamese automobile market with 7,551 vehicles sold, an increase of more than 900 vehicles compared to the previous month.

Next are TC Motor and Toyota, two manufacturers chasing each other closely on the overall sales chart. TC Motor surpassed Toyota by just 28 units and held second place with 5,108 units sold. Next is Toyota with 5,090 units sold.

In the following positions, despite Ford's outstanding growth, VinFast still maintained its 4th position with 3,155 electric vehicles sold to the market, only 34 more than Ford in 5th position with sales of 3,121 vehicles in June.

Other manufacturers on the overall car sales chart are Mitsubishi with 2,264 vehicles, Honda with 1,419 vehicles, Suzuki with 1,054 vehicles, Isuzu with 736 vehicles and Lexus with 138 vehicles.

Many stimulus policies, expecting purchasing power to return

According to industry experts, the Vietnamese auto market flourished last June largely thanks to companies aggressively reducing prices and offering promotions by supporting customers with 50-100% of registration fees or directly reducing the selling price of the car or giving away accessories to stimulate consumption.

This was more evident in June when passenger car sales increased by 20% (reaching 17,344 vehicles); of which, domestically assembled cars increased by 28% while imported cars only reached 8,312 vehicles, down 4% compared to the previous month.

Explaining this, dealers of many car companies revealed that, in addition to the incentives to stimulate consumption from car companies and dealers that have been maintained for a long time, before the information about a 50% reduction in registration fees for domestically assembled cars from July 1, many people who wanted to buy cars signed contracts as early as June to enjoy double incentives.

According to a representative of THACO AUTO, in the context of the Vietnamese automobile market having continuously declined in sales since the beginning of 2023, the policy of reducing registration fees by 50% is expected to create a driving force to stimulate consumer demand for automobile purchases, while helping automobile manufacturing and trading enterprises regain sales growth momentum.

The 50% reduction in registration fees means that customers only need to pay 5-6% of the vehicle's value, instead of 10-12% as before.

In particular, during this time, customers who issue invoices in June and register in July will enjoy double incentives, saving from tens to hundreds of millions of VND by keeping the best price program in June, while also benefiting from the 50% reduction in registration fees.

However, experts also said that the Vietnamese automobile market in 2023 has gone halfway, but total market sales only reached nearly 177,000 vehicles, nearly one-third of the total sales in 2022 at more than 500,000 vehicles.

Therefore, experts predict that car consumption in 2023 will be at around 354,000 vehicles, about 70% compared to the previous year due to economic difficulties and a decrease in people's income, leading to weak consumption of this product.

Meanwhile, car manufacturers expect that along with adjusting selling prices and offering promotions to reduce inventory, the policy of reducing registration fees will be effective in the last two quarters of the year, while economic recovery will bring back purchasing power.