European cars reduced in price by hundreds of millions of dong in Vietnam

After Japanese and Korean cars... it's the turn of European cars to be discounted by hundreds of millions of dong by distributors and dealers to attract buyers.

Volkswagen Touareg in Vietnam reduces selling price by 260 million VND

Never before have car prices in Vietnam changed so dramatically as they have since the beginning of the year. Competitive pressure as import taxes on cars from ASEAN to Vietnam are decreasing and will be reduced to 0% from 2018 has caused car dealers to continuously apply the policy of “big discounts”.

Not only domestic automobile manufacturing and assembly units are pioneers in reducing prices, aiming to create markets, aiming to increase the localization rate of products to compete... but even importers and distributors of cars from Europe are not left out.

Recently, a series of car brands from Europe such as Volkswagen, Peugeot or Volvo have launched incentive programs, reducing the selling price of some car models for car buyers. Volkswagen Vietnam is probably the most "willing to spend" in the price reduction race. After a series of incentive programs for the registration fee for the Touareg model. In June 2016, the distributor of the German car brand in Vietnam continued to reduce 260 million VND for this SUV model. Thus, with this reduction, the current selling price of Volkswagen Touareg is 2.629 billion VND.

In addition, to compete with Japanese models such as Toyota Vios, Honda City... in the B-class sedan segment, Volkswagen also reduced 50 million VND for the Polo model. It is highly appreciated for its equipment, performance and the "reputation" of a car imported completely from Europe. However, the selling price of more than 700 million VND since entering the Vietnamese market has made Volkswagen Polo unable to compete with Japanese car manufacturers, despite providing both sedan and hatchback versions. With the discount program applied since June 2017, the selling price of Volkswagen Polo has returned to 690 - 695 million VND.

Meanwhile, since mid-June 2017, THACO has announced a new selling price for the Peugeot 3008 model with a reduction of 75 million VND, down to 995 million VND, along with a gift of 1 year of physical insurance for car buyers. Thus, after nearly 3 years since its distribution in Vietnam, the selling price of the Peugeot 3008 has dropped to under 1 billion VND. This price makes it easier for the Peugeot 3008 to compete with the Mazda CX-5, Honda CR-V or Nissan X-Trail... Crossover models that have been sharply reducing their selling prices in recent months. Currently, the 3008 model has been transferred technology by Peugeot for THACO to assemble in Vietnam.

The Swedish car brand Volvo, although new to the Vietnamese market, is not out of the race for incentives and discounts. Specifically, for the XC60 model, which is priced at 1.9 billion VND, Volvo is applying a program to support 100% of the registration fee and gifts with a total value of 257 million VND. Meanwhile, for the Volvo XC90 and S90 models, car buyers are offered incentives including 1 year of vehicle physical insurance and gift vouchers with a total value of 60 million VND.

Compared to Japanese and Korean cars, the prices of European car models are being rapidly and sharply reduced by distributors, with a difference of up to tens to hundreds of millions of dong, in order to attract consumers. This is considered an inevitable trend in the context of an increasingly competitive market.

Currently, the import tax rate for complete cars from Europe to Vietnam is at 55 - 70% depending on the car model and will not decrease from 2018 like cars imported from ASEAN. This is expected to create many difficulties for importers and distributors of cars originating from Europe. In fact, in order to continue to maintain competitiveness in the race to reduce car prices in Vietnam, these units need to change their business strategies and product distribution in Vietnam.

According to TNO