Car market: No buyers

Since the beginning of February, the auto market, both new and used, has been sluggish, with many manufacturers reporting that they have not sold a single new car for the entire month.

With no customers, the staff only has to clean the outside of the car - Photo: Le Nam

Used car shopping centers for Ford and Toyota brands in Ho Chi Minh City said that since Tet, customers coming to see and buy have been sparse, with purchasing power only 30-40% compared to the time before Tet.

Salon owners are waiting for customers, while car dealers mainly live on revenue from car maintenance and repair.

Used cars: more sold than bought

Walking around the used car market in Ho Chi Minh City located along Pham Hung Street, District 8, we were struck by the deserted scene at all the showrooms.

At a car showroom here, where there are eight cars, six of which are Japanese and two Korean, a young man is diligently washing the cars on the outermost side, close to the road, which is covered with a thin layer of dust.

Pointing to seven cars parked neatly in the showroom, Mr. Khac Thao, owner of Hiep auto salon, said that in the past two days, no customers have come to see the cars. In the whole month of February, he only sold three cars, one Japanese brand, the other two Korean, a significant decrease compared to before Tet. In his eight years of selling used cars, Mr. Thao said that in the past three years, business has been getting worse.

Mr. Le Duc Toan, owner of Toan Thang used car salon (Pham Hung Street, District 8), said that the number of cars sold has decreased significantly since Tet, and customers selling used cars are offering prices that are too high compared to the salon owners' ability to buy them. "The number of customers now is only three-thirds of what it was before Tet, there are not many customers so we are not interested in trying to buy cars at all costs" - Mr. Duc Toan said.

Used car buyers usually only “hunt” for cars priced under 1 billion VND because they are easy to sell, and best-selling cars cost around 700 million VND. With nearly 15 years of experience in this business, Mr. Duc Toan said that 95% of his customers are former car owners who buy used cars with cash.

Most used car dealerships borrow money to buy cars at an interest rate of 1-1.2%/month, not to mention the rental fee for a showroom of 20-40 million VND/month depending on location, area, plus 2-3 workers, electricity and water... "A car that has been bought but cannot be "pushed" within 3-4 months is considered a loss, so as long as a customer asks, a profit of about 5 million VND is sold immediately, for cars that have been left for a long time, getting a break-even price is a great joy" - said the owner of a used car showroom, Pham Hung.

Mr. Do Minh Ho Hai, director of Xuyen Viet Company (otosaigon forum), said that after Tet, the number of used cars registered for sale on this forum increased compared to previous months. "On average, the forum only accepts about 40 cars for sale/month, but the number of used cars registered since after Tet has increased to nearly 70 cars/month" - Mr. Ho Hai said.

New cars: not sold a single one for a month

According to the report of the Vietnam Automobile Manufacturers Association (VAMA), if including the first two months of 2014, the number of cars sold increased by 39% compared to the same period, in which the number of cars sold increased by 44% due to consumers rushing to buy cars to travel during Tet. If only counting in February, members only sold 4,509 cars, down 46% compared to the previous month, imported cars also dropped to only 2,080 cars, down 33% compared to the previous month. The number of assembled cars also decreased by 34% compared to the previous month, reaching 5,234 cars.

Many VAMA member car manufacturers said that some of their car models could not sell even one car in the whole month of February. A representative of GM Vietnam said that in January, while the sales of VAMA members increased rapidly, this brand only sold eight Chevrolet Captiva LTZ 2.4AT (a new car model introduced in October 2013) in the whole market, and in February, only one car was delivered to customers.

Meanwhile, Ford Vietnam did not sell any Escape in February, sales of Civic 1.8 MT and Accord of Honda Vietnam joint venture were also zero in February. Truong Hai Company did not sell any Forte, including automatic and manual transmission, or Mazda CX5 (2WD) in February 2014.

The general director of a VAMA member dealership said that in February and March, they mainly lived on car warranty repair services, and new car sales were not as high because customers no longer had as much motivation to buy cars as before Tet. According to this person's explanation, consumers are starting to save again after spending during Tet, and the whole market is waiting for VAMA's new car models to heat up again.

Mr. Jesus Metelo Arias, president of VAMA, said that although February sales were low, they were 61% higher than February 2013. He predicted that this year the entire Vietnamese automobile market will likely sell 120,000 vehicles, an increase of 9% compared to the whole of 2013.

According to tuoitre.online