Vietnam’s automobile market decline by nearly 30% in early 2023

27 Mar 2023

After two months, total sales of VAMA, Hyundai, VinFast and other importers reached more than 50,000, a drop of 27% compared to the same period in 2022.

Nhân viên tư vấn cho khách tại một đại lý Ford ở TP HCM. Ảnh: Phạm Trung

In February, automobile consumption in Vietnam prospered again after the Lunar New Year holiday period (which takes place on May 1). All automakers recorded sales increases. However, cumulatively from the beginning of 2023, the sales volume of the whole market is still down compared to the same period in 2022.

The fact that brands and dealers actively promote in many ways such as supporting registration fees, discounting cars, giving accessories, helps stimulate purchasing power. The Vietnam Automobile Manufacturers Association (VAMA) and other importers sold 23,040 vehicles, increased by 33% from the previous month but almost undeveloped (increased by 1%) compared to the same period in 2022 (the month with Lunar New Year).

Similarly, Hyundai reached 5,467 units in sale in February, equivalent to a growth of 56% compared to last month . VinFast has sales increased slightly, by 16%, reached 16 units in February. Combining the three brands above, the whole market has 416,2 vehicles sold, fall by 50% compared to the first two months of 2022, equivalent to an average of 830 vehicles sold per day.

The market’s purchasing power decreased as predicted by both automakers and industry experts. Macroeconomic fluctuations, rising lending interest rates… these factors causing vehicle purchase demand to slow down from the end of 2022 and extend into early 2023. VAMA’s statistics show that all companies has sales decreased after the past two months, except Ford (grown by 221%). Leading the declines were Peugeot of 78%, Kia of 57% and Honda of 49%.

In addition to the stimulus programs of the automakers, the automobile market is waiting for another support from the state. The Government has assigned the Ministry of Finance to assume the prime responsibility for, and coordinate with other agencies in researching a proposal to offer a 50% discount on registration fee for domestically produced cars.

The above proposal is from VAMA, Vietnam Association of Mechanical Industry (VAMI), Quang Nam Provincial People’s Committee where Truong Hai’s factory located (which assembles and sells vehicles of Kia, Mazda, Peugeot, BMW brands), Ninh Binh People’s Committee – where TC Group’s factory (Hyundai cars seller) located.

Not only companies with assembled cars, the Vehicles Importers Vietnam Association (VIVA) also wants to receive similar incentives for imported cars if the policy of reducing registration fees for newly sold cars by 50% is approved. VIVA consists of serveral automakers such as: Audi, Bentley, Porsche, Volkswagen, Subaru…

According to a businessman named Vo Quoc Binh, as known as CEO of Binh Minh Company, an enterprise specializing in trading used cars and car cares services in Ho Chi Minh City, the automobile market this year is difficult to grow without support solutions from the Government and the automakers themselves. “Registration fee support is a way to stimulate consumption but not completely change people’s demand if inflation and consumer loan interest rates remain high”, he added.



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