Automobile companies offer discount pushing its sales to soar

When the coronavirus disease re-occurred in the Southeast Asian country, automobile manufacturers have offered incentive programs through which they discount the price of a car to their dealers for a promotion period.

For instance, Toyota Motor Corp offered a discount of VND20 million – VND30 million for some cars. Similarly, KIA lowered the prices of two kinds of cars.

Earlier in June, buyers enjoyed a discount of VND200 million if they purchased a BMW 3-Series or an MG-HS as the importer of Subaru decreased retail price for the two kinds. Additionally, it also offered a discount of VND159 million for another car model.

Unlike the time before, automobile manufacturers only offered discounts on "out-of-fashion" lines, but now companies are racing to reduce car models, especially popular models with deeper discounts to stimulate demand, said Ngo Thanh Tri, Sales Department of Ford Dealership Kinh Duong Vuong in Ho Chi Minh City’s Binh Tan District. For example, Ford is applying a strong discount from VND 45 million -VND95 million on the SUV model.

Generally speaking, customers were attracted by deep price reductions; therefore, the car market has shown good signs amid the epidemic. According to the Vietnam Automobile Manufacturers’ Association (VAMA), total sales by the end of May of the whole market increased by 53 percent against the same period last year. In which, passenger cars increased by 51 percent, commercial vehicles hiked by 56 percent, and specialized vehicles soared by 59 percent over the same period. Particularly, sales of domestically assembled cars increased by 42 percent while imported cars leaped by 69 percent year on year.

Paradoxically, even though the country is trying to reduce prices to sell cars due to concerns about sluggishness and inventories because consumers tighten their spending, imported cars have still flooded into the port. According to the General Department of Customs’ latest data, Vietnam imported more than 65,736 cars, worth about US$1.5 billion in the first five months of 2021, up 78 percent in volume and 83.1 percent in value compared to the first five months of 2020.

Aside from that, 43,500 cars with nine seats or less were imported in Vietnam, increasing 53 percent against the same period last year. Huynh Le Nguyen, an expert in the auto industry, said the number of imported cars now usually follows manufacturers’ set plan. Presently, it is likely that imported cars will be in stock, waiting for the market to return to normal.

The General Department of Customs’ figure has shown that 6,172 cars of all kinds completing customs clearance procedures into the Vietnamese market in the first 15 days of June, worth US4146 million. Of 6,172 cars, passenger cars with less than 9 seats accounted for 65.6 percent, 1,512 trucks were made of 24 percent. Domestic vehicle manufacturers and assembly companies have spent more than $242 million to import auto parts and components in the first 15 days of June, increasing the industry’s import turnover by more than $2.398 billion from the beginning of the year to June 15.