Auto production continues to plummet; USD surge puts pressure on gold

Auto production continues to decline, localities worry about budget deficit

Domestic car production has recorded a sharp decline in the first four months of the year. Not only that, car sales are also on a downward trend.

According to a report by the People's Committee of Vinh Phuc province, the production output of all types of automobiles in the first four months of the year was 11,469 vehicles, down 43% over the same period. At the same time, automobile production activities also decreased by 40.18%.

Another report from the Department of Industry and Trade of Vinh Phuc province also said that Toyota Vietnam Company, a large FDI enterprise in the locality, had its first quarter output decrease by 37%, equivalent to 2,802 vehicles, compared to the same period last year.

According to the Vietnam Automobile Manufacturers Association (VAMA), car sales continued to decline in the first months of the year. This is causing concern for many manufacturing enterprises. Some localities may suffer budget deficits and workers may lose their jobs.

Localities are looking forward to policies to stimulate consumption and car production. Photo: Viet Linh

According to VAMA, the total market sales in April reached only 22,409 vehicles, including 15,748 passenger cars; 6,487 commercial vehicles and 174 specialized vehicles. All segments had a sharp decrease compared to March, such as passenger cars down 27%; commercial vehicles down 19% and specialized vehicles down 51%.

If only counting VAMA members, sales fell even more sharply. Specifically, only 20,667 vehicles of all kinds were sold in April 2023, down 46% compared to April 2022 and down 21% compared to March 2023.

Among these, the passenger car segment witnessed the sharpest decrease among the segments, down 54% compared to April 2022 and down 25% compared to March 2023.

Local leaders said the reason for this decline was due to the fact that the registration tax reduction policy was not extended. Along with that, many domestic auto companies are also facing fierce competition to gain market share.

For members outside VAMA, the situation is no better. Hyundai is experiencing a sharp decline in sales from the end of 2022 to April 2023. The total number of Hyundai cars sold last month reached 4,592, while in March, 5,773 were sold.

Regarding passenger cars alone, 3,355 cars were sold in April; 4,757 in March; and 4,753 in February. Previously, in November-December 2020, sales were around 7,000-9,000 cars.

According to a report by the Ministry of Industry and Trade, the output of assembled cars in April only reached about 29,500 vehicles, with a cumulative 4-month figure of 109,500 vehicles, down 19.3% over the same period in 2022.

Not only manufacturers, but also auto distributors recorded a gloomy business in the first quarter. For example, Savico - a distributor of many brands such as Toyota, Ford, Honda, Hyundai, Mitsubishi, Volvo... recorded a gloomy business quarter. Profit after tax in the first quarter was only 14.7 billion VND, down nearly 85% compared to the same period in 2022 and down more than 11 times compared to the previous quarter. The company's inventory exceeded 2,000 billion VND.

Haxaco, which distributes the Mercedes-Benz brand, also saw its revenue decrease by more than 40% compared to the same period last year, reaching less than VND1,000 billion. Pre-tax profit was only VND5.6 billion in the first quarter - a decrease of about 92%.

USD surge puts pressure on gold

Gold prices today (May 17) on the international market are under quite strong downward pressure. Investors believe that they bet too early on the possibility of the US quickly reducing interest rates. However, the gold price is still above the threshold of 2,000 USD/ounce.

At the end of the trading session on May 16, the domestic 9999 gold price was listed by SJC and Doji Gold and Gemstone Group in the following order of buying and selling:

SJC Hanoi: 66,550,000 VND/tael - 67,170,000 VND/tael.

Doji Hanoi: 66,550,000 VND/tael - 67,150,000 VND/tael.

SJC HCMC: 66,550,000 VND/tael - 67,150,000 VND/tael.

Doji HCMC: 66,550,000 VND/tael - 67,150,000 VND/tael.

On the night of May 16 (Vietnam time), the world spot gold price dropped to 2,006 USD/ounce. Gold for June delivery on the Comex New York floor was at 2,008 USD/ounce.

The world gold price on the night of May 16 was about 10% higher (182 USD/ounce) than at the beginning of 2023. World gold converted according to the bank USD price was 57.7 million VND/tael (including tax and fees), about 9.4 million VND/tael lower than the domestic gold price as of the end of the afternoon session on May 16.

Gold was under pressure to fall as the DXY index - which measures the greenback's performance against a basket of six major world currencies - rose sharply to 102.4 points. Previously, the index had reached 101 points.

The US dollar rose again as many investors said they had bet too early on the possibility that the US Federal Reserve (Fed) would quickly reverse monetary policy and cut interest rates after 10 consecutive increases.

Gold has been on the rise since the start of the year as investors expect the Fed’s rate hike cycle to end soon, according to Georgette Boele. Concerns about the economic outlook, high inflation and geopolitical tensions have also pushed gold up.

However, Georgette Boele noted that the rally has been limited at current levels. “The market is expecting the Fed to start cutting rates in the third quarter, which is reflected in the (rising) gold price. However, we think that the rate cut will come later, possibly towards the end of the year,” Boele said.

Besides, the USD has not decreased in price, which will affect the gold's upward momentum in the coming months.

However, in the long term, gold is still considered to be in an uptrend. Gold may break out in 2024 when the Fed, the European Central Bank (ECB) and the Bank of England (BOE) begin to loosen monetary policy. Gold is forecast to be at $2,000/ounce in 2023 and $2,200/ounce in 2024.

High import demand, high rice prices

Rice prices in the Mekong Delta remained unchanged today (May 17). The rice market was stable, with prices remaining high due to reduced supply.

Regarding rice, the prices of raw rice and finished rice products remained stable. Accordingly, the price of raw rice was at VND9,750/kg; the price of finished rice products remained stable at VND11,200/kg.

Rice market transactions are stable, prices remain high due to reduced supply.

Regarding by-products, the price of by-products remains stable. Accordingly, the current price of IR 504 rice bran is at 9,400 VND/kg. Meanwhile, dry bran fluctuates around 7,350 - 7,450 VND/kg.

According to traders, today the amount of raw rice has been low, the price of all types of rice is stable. The price of summer-autumn rice is relatively stable, new rice transactions are regular. Only fresh sticky rice prices have slightly decreased.

In the export market, according to the Vietnam Food Association, the export price of 5% broken rice from Vietnam is at 488 USD/ton; 25% broken rice is at 468 USD/ton; and Jasmine rice is at 553-557 USD/ton.

The USDA May 2023 forecast shows that global rice production in 2022/23 is expected to decline further due to poor harvests in Burma and Pakistan. Exports and imports are lower than previously forecast.

While production and inventories are expected to decline, global rice consumption is forecast to increase by 0.9 million tonnes to a record 520 million tonnes.

Pepper prices forecast positive prospects both domestically and internationally

Pepper prices today, May 17, in the domestic market have not fluctuated. Accordingly, in Gia Lai, pepper prices today are purchased by traders at 73,500 VND/kg.

In Dak Lak and Dak Nong provinces, pepper prices today are stable at 75,000 VND/kg.

In the Southeast provinces including Dong Nai, Binh Phuoc, and Ba Ria - Vung Tau, pepper prices today also fluctuated around 76,500 - 77,000 VND/kg.

Currently, Vietnam ranks first in terms of export proportion and global pepper export output.

Specifically, in Dong Nai and Binh Phuoc, the price remains at 76,500 VND/kg; in Ba Ria - Vung Tau, the purchase price is the highest, at 77,000 VND/kg.

Thus, after the first two sessions of the week with an increase of 1,500 VND/kg, pepper prices today in key regions did not fluctuate further.

In the world market, listed pepper prices of some countries increased slightly.

Viet Phuong (According to Congthuong.vn/vietnamnet.vn)