Big car sale: Sales tricks that make customers fall over

A series of domestically produced and assembled cars have massively announced price reductions in early June. What is the truth behind these price reductions? Is the reduction due to the previous high car prices, or is it just a move to push out old, unsold models to clear inventory?

Non-stop big sale

In mid-May 2017, a representative of Truong Hai Auto Company announced that the price of domestically assembled Mazda cars had hit rock bottom and could not be reduced any further. If there was a reduction, it would only be done by the dealers themselves.

But surprisingly in early June, Truong Hai announced a price reduction of 30-40 million VND for the Mazda CX5 model.

Specifically, the Mazda CX5 2.0L version has reduced its selling price from 879 million VND to 849 million VND, the 2.5L, 1-wheel drive version has reduced its selling price from 910 million VND to 880 million VND and the 2.5L, 2-wheel drive version has reduced its selling price from 990 million VND to 950 million VND. Along with that, customers who buy a car will receive a warranty package of up to 5 years or 150,000 km, 1 year of physical insurance and 1 year of civil liability insurance.

Car models have been heavily discounted over the past month.

Toyota Vietnam did not reduce car prices but also launched a "huge promotion" program, giving away a 3-year or 60,000 km periodic maintenance package for customers who bought cars in June. In the market, the prices of all car models distributed by Toyota Vietnam have decreased sharply. Camry decreased from 95-120 million VND, Altis decreased by 55-70 million VND, Innova decreased by 65-70 million VND, depending on the version.

Following the deep discount of 10-70 million VND for Hyundai models in Vietnam in May 2017, the Korean car brand continues to maintain the above promotion level for this June. In particular, the best incentives still belong to 2 models being assembled domestically, Elantra and Santa Fe, up to 70 million VND in cash.

In addition, each dealer has additional incentives, targeting vehicles assembled in 2016. Specifically, the 2016 Santa Fe 2.2L Diesel version currently has a transaction price of only about 1.12 billion VND, a significant decrease compared to the original price of 1.23 billion VND. Lower versions also cost about 1.05 billion VND.

All Ford car models are currently being sold at unprecedented low prices, including the Ford Everest model with a discount of up to 100 million VND. Currently, the Ford Everest 2.2L Trend model is holding a record discount of up to 110 million VND, the actual selling price at dealers is only 1.080 billion VND.

Ford Focus was adjusted to reduce by 5-10 million VND in June 2017. Specifically, the Focus 1.5 Titanium and Sport 5-door versions have the same new price of 750 million VND. Meanwhile, the Focus Trend version is priced at 605 million VND.

The newly launched Ford Ranger version, Wildtrak 3.2 Navigation, is currently priced at VND885 million, about VND40 million lower than the suggested price. The remaining versions of the Ranger do not have a discount program in June, however, compared to the announced price, the Ford Ranger is nearly VND100 million lower, depending on the version.

Currently, some car models are still sold in parallel with both 2016 and 2017 versions. The 2016 version always has a stronger price reduction than the 2017 version.

Push inventory?

High competitive pressure and increasing inventory are "breathing hot air", causing many upcoming car models to have to reconsider their sales plans.

In the SUV segment, models such as Nissan Xtrail or Honda CRV, although having reduced prices significantly, still have a large gap compared to their competitor, the CX5, especially after the CX5 has just reduced its price and "huge promotion". This allows car manufacturers to continue to rush into the price reduction race.

Information from businesses shows that a series of new car models will be launched soon, preparing for the 2018 market, so they are quickly resolving the old car models despite the loss. Currently, some car models are still being sold in parallel with both 2016 and 2017 versions. The 2016 version always has a stronger price reduction than the 2017 version.

For example, the Camry model is currently discounted by 90-120 million VND, but the 2016 version will be discounted more heavily by dealers than the 2017 version. Comparing the 2016 and 2017 versions, there are insignificant differences, such as the 2.0L and 2.5G versions being upgraded from 4 airbags to 7 airbags, or the 2.5 Q version with a screen size increased from 6.3 inches to 7 inches, leather-wrapped gear lever...

The Santa Fe model manufactured in 2016 is not different in terms of features and technical factors, compared to the 2017 model. However, the price is significantly lower than the 2017 model because the dealer wants to quickly push the number of Santa Fe cars manufactured at the end of 2016 to the market, to avoid inventory.

However, even 2017 models are having to reduce prices to sell, because a new product is about to be launched. The new generation Camry 2018 has been launched in Japan, the US, and will soon be launched in Southeast Asia. The old generation was launched in 2015, and has only been upgraded slightly in recent times. Therefore, models manufactured and assembled in 2017 also need to be sold quickly to prepare for the new generation.

Similarly, with some car models of brands such as Hyundai, Mazda, Ford,... car prices are still on the decline, although many dealers said they are suffering losses because they have reduced prices too much.

Since the beginning of 2017, only the import tax rate for complete cars from ASEAN to Vietnam has decreased by 10%, while other taxes and fees, for domestically assembled cars and cars imported from outside the region, have not decreased. Taxes and fees have not decreased, but car prices have decreased sharply because businesses have cut costs and profits to the maximum, even accepting losses. Many customers believe that car prices have decreased, but are still twice as high as in the region, and need to be reduced further.

But taxes alone currently account for 50% of car prices. If taxes and fees are not reduced, car prices will hardly be on par with other countries, said a car dealer.

According to VNN