When is the best time to buy a car?

The "war" for car market share has never been as fierce as it is now, when companies compete to reduce prices by up to several hundred million dong.

Winning every inch of market share

At the end of 2016, Truong Hai Auto Corporation shocked the market by sharply reducing the prices of Mazda versions with a reduction of up to 170 million VND/car. As a result, by the end of 2016, this company surpassed Toyota to become the company that sells the most cars in Vietnam, accounting for a market share of 24.1%. However, by 2017, Truong Hai no longer has much room to reduce prices, because according to the company's leaders, the price reduction at the end of 2016 has "hit rock bottom". Therefore, in the past half year, the market has not recorded any more significant price reduction information from Truong Hai's Mazda and Kia models.

Meanwhile, Toyota - a heavyweight competitor of Truong Hai, although entering the price reduction race quite late and the reduction margin is not much, has maintained this strategy quite regularly up to this point. Notably, from August 8, this company has adjusted the retail price for 3 models Honda CR-V, Honda Civic and Honda Accord with a discount of up to 170 million VND; Vios, Corolla Altis or Innova have incentives from 11 - 40 million VND; Camry versions have a discount of 90-100 million VND; Land Cruiser VX also adjusted a discount of up to 130 million VND... This price reduction has brought an immediate effect on the market when in the first 7 months of 2017, Toyota surpassed Truong Hai, regaining the leading position in the passenger car segment with 23.4% market share, while Truong Hai only accounted for 19.8% market share.

Car companies are competing to reduce prices by up to several hundred million dong.

Not only the two car companies with the largest market share, but other companies are also competing to reduce prices. Ford recently announced a new price list with a reduction of 59 million VND for the EcoSport Titanium version, some other versions also have a reduction of 40 - 50 million VND. Honda's Odyssey model imported completely from Japan has been adjusted down by up to 200 million VND or Honda CR-V has also been adjusted down from 100 - 170 million VND. Similarly, at Mitsubishi, the Pajero 3.0 model also recorded a price reduction of up to 164 million VND or the new Pajero Sport 4x2 AT gasoline engine version has also been adjusted down by 106 million VND...

The "war" of 4-wheel vehicles has become more fierce than ever when a series of models assembled in Southeast Asia have recently been introduced. Notably, a series of Japanese car manufacturers have launched low-cost models assembled in ASEAN, expected to be launched in the market in the near future, such as Honda (assembled in Thailand), Toyota (Indonesia) or Suzuki (Thailand - India joint venture). These models have prices ranging from 400-500 million VND, and are expected to be "heavyweight competitors" to small car models that currently occupy a large market share in Vietnam, such as Kia Morning, Hyundai i10, Chevrolet Spark... when the import tax on complete cars from ASEAN to Vietnam is eliminated in 2018.

When is the best time to buy a car?

According to experts, the automobile market is showing signs of slowing down due to the impact of information on tax policies. People are waiting for next year when the tax rate on imported ASEAN cars will be 0% instead of 30% as at present. The closer to this time, the more difficult it is for car companies to sell their products. The automobile market has never witnessed such a fierce price race as it is now, but consumption has not increased, and has even decreased.

Mr. Nguyen Van Cuong, a sales employee at a Hyundai showroom, said that in previous years, people would buy a lot of cars to avoid the 7th month according to folk beliefs. However, at this time this year, the number of purchases was only slightly higher despite the company launching many promotional and discount programs for customers. For example, in May, Hyundai had a SantanFe model that was discounted up to 70 million VND. Notably, in addition to the listed promotional price, showrooms also offered customer support programs with additional discounts of up to 60 million VND, bringing the total discount to 130 million VND.

Newly released figures show that the business situation of automobile manufacturers in the first months of the year is not very positive. The report of the Vietnam Automobile Manufacturers Association (VAMA) also recorded that the sales of its members continued to decrease by 15% compared to June and 27% compared to July 2016. Accumulated from the beginning of the year, VAMA's total sales decreased by 6% compared to the same period last year. It can be seen that with these figures, the sales growth target of 10% set in 2017 is almost impossible to achieve when it is forecasted that sales will not improve much by the end of the year.

Consumer psychology of waiting for tax reduction has forced car companies to simultaneously reduce selling prices.

According to Mr. Nguyen Tuan, Director of Thien Phuc An Company, an expert in the automobile industry, there are many factors predicting that the automobile market will be quiet at the end of this year. After the seventh lunar month, there are only a few months left before ASEAN import tax will be 0%, so people will have a wait-and-see mentality.

“Not only will import tax decrease, but special consumption tax and value added tax will also decrease, so the reduction will not be 30% but much more. Therefore, people will definitely wait until early 2018 to buy cars that are not only cheap but also have many new models and new technologies...”, Mr. Nguyen Tuan analyzed and said that in this situation, car manufacturers will definitely have to continue to reduce prices to stimulate consumer demand. Especially old models will be heavily discounted by manufacturers to push sales.

According to Capital Security Newspaper