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Automobile owners enjoy a cut in registration fees from July 1 |
This policy is considered an important factor in stimulating the auto market in the last months of the year.
Continuous pricing decrease
According to some Ford dealers, they are reducing incentives from VND3 million-VND50 million (US$126 - $2,114) compared to June. For instance, they are offering incentives for the Ford Territory at VND30 million-VND40 million with accessories; VND20 million-VND40 million for the Ford Ranger and accessories gifts for car buyers in July. Meanwhile, Honda's CR-V model continues to apply a 100 percent support program for buyers’ registration fees excluding a 50 percent fee reduction.
Thus, customers who buy CR-V models during this time can enjoy a discount equivalent to 150 percent of the payable registration fee or they enjoy an unprecedented reduction of about VND150 million-VND200 million. Currently, Honda CR-V is priced from VND998 million to more than VND1.1 billion.
Mr. Tan Tai, an employee of a Toyota dealer in Ho Chi Minh City, said that the incentives in July have been slightly adjusted compared to the period before the implementation of the registration fee support policy.
Currently, customers who have deposited a car in June and received the car in July have enjoyed the largest incentive value. According to Mr. Tai's advice, the current incentive for Toyota Vios is up to VND25 million in the G version while the E version has a discount of VND15 million. Toyota Vios and Toyota Veloz Cross/Avanza Premio models; Toyota Innova and Toyota Fortuner diesel versions are eligible for a 50 percent discount on registration fees.
Similarly, Truong Hai Automobile Joint Stock Company also has many models of domestically produced and assembled cars that are entitled to preferential treatment policies. The company directly reduces the announced prices of many locally assembled car models such as Kia and Mazda in combination with the policy of a 50 percent reduction in registration fees.
Purchasing power is still poor
Despite the reduction in registration fees, the auto market in mid-July did not see many positive changes with a few buyers. According to the representative of Mazda Tan Son Nhat showroom in Ho Chi Minh City’s Phu Nhuan District, in June when automobile shops were preparing for the new policy on registration fees, dealers have reduced 50 percent-100 percent of registration fees but not many customers buying cars to enjoy the incentives.
Mr. Nguyen Thanh Tri, a representative of Western Ford Company in Ho Chi Minh City’s Binh Tan District, also moaned about the weak purchasing power and a low number of sold cars in the past few months compared to the same period in other years. Though the Western Ford Company has launched policies to reduce prices, offer promotions, and stimulate shopping demand, its stock still remains.
While sales of new cars this year were disappointing, the purchasing power of the used car market is not much better. According to some used car salon owners in Ho Chi Minh City, in June and July 2023, people still bought sedans cars or some small high-rise cars of brands like Kia, Hyundai, Toyota, or Mitsubishi with prices from VND300 million to VND500 million, whereas very few customers were interested in products with high fuel consumption and higher prices.
The current market has forced used car salon owners to constantly update new prices for products on sale. The price difference between the salons offered is also quite close, only about VND5 million-VND10 million, depending on the color and new condition of the car.
Specifically, Ms. Nguyen Thi Hien, owner of the Toyota showroom on Pham Hung Street in Ho Chi Minh City’s District 8 revealed that the used car market in the southern largest city in the first 6 months of the year decreased quite a lot compared to the previous year, because of the difficult economy so people tended to save money. Used car showrooms have seen no buyers. Therefore, every time, car companies offer discounts, she worried much because imported old cars have not been sold, but new cars have reduced prices, and these owners of used cars like her will surely lose money.
According to Mr. Huynh Van Sang, General Director of Toyota East Saigon Joint Stock Company, to stimulate consumer demand for the auto market, in addition to reducing registration fees, car manufacturers and showrooms need to launch more promotions and discounts to stimulate demand. It is forecast that small and affordable car models will attract customers contributing to increased car sales in the coming time.
The Vietnam Automobile Manufacturers Association (VAMA) said that in June 2023, roughly 23,800 vehicles were sold, an increase of 15 percent compared to May 2023. Accumulating sales in the first 6 months of 2023, VAMA members have sold 201,839 cars of all kinds, a year-on-year decrease of 32 percent. Of various kinds, passenger cars saw a decline of 37 percent while commercial vehicles dropped by 11 percent, and specialized vehicles decreased by 65 percent.
However, the above figure does not fully reflect the sales of the entire Vietnamese market, because the market also has had other brands that are not members of VAMA such as TC Group, Audi, Jaguar Land Rover, Mercedes-Benz, Nissan, Subaru, Volkswagen, Volvo.
