The automotive market is sluggish.

13/05/2024 06:50

Is the automotive market waiting for new stimulus policies? (Photo: PV)

(PLVN) - In the first months of 2024, the automotive market continued to witness a decline in sales, despite car manufacturers implementing numerous promotional programs and offering deep discounts.

Sales declined despite stimulus programs.

According to the Vietnam Automobile Manufacturers Association (VAMA), in April 2024, total market sales reached 24,350 vehicles, a decrease of 11% compared to March 2024 and an increase of 9% compared to the same period in 2023. Specifically, total market sales of 24,350 vehicles included 17,258 passenger cars; 6,815 commercial vehicles; and 277 specialized vehicles. Sales of both domestically assembled and imported vehicles decreased; however, sales of domestically assembled vehicles saw a sharp decline of 17% compared to the previous month, while sales of imported vehicles decreased less significantly, by 3% compared to the previous month.

Overall, by the end of April 2024, total sales across the market decreased by 11% compared to 2023, with passenger cars down 14%; commercial vehicles down 3%; and specialized vehicles down 28%.

According to many automotive market experts, this result is not entirely unexpected, as, like in previous years, the automotive market always experiences a decline in the first half of the year. However, the market seems to be facing significant difficulties as sales continue to fall sharply, despite car manufacturers offering promotional programs and price reductions ranging from tens of millions to over a hundred million VND, depending on the model.

For example, Honda Vietnam continues to offer special support programs for 2023 CR-V and City models, with support covering 50-100% of registration fees, along with cash gifts, comprehensive insurance packages, and accessory gifts. The total value ranges from 80 to 140 million VND. For the Accord model specifically, buyers will receive a cash subsidy of 220 million VND, along with promotions from dealerships.

Ford Vietnam has also announced a price reduction of 23-25 ​​million VND for the Teritory model. Along with the retail price reduction, the company is also offering a "3-year comprehensive insurance" package worth over 30 million VND. Other Ford models maintain their retail prices but come with an additional 2 years of warranty. Therefore, customers purchasing Ford vehicles (excluding the Teritory) in April 2024 will receive a total warranty of 5 years, including 3 years of standard warranty and 2 years of extended warranty.

Even in the luxury car segment, manufacturers have engaged in a rather shocking promotional race, with Mercedes offering discounts of hundreds of millions of VND on a range of 2022 models. BMW models such as the Series 3, Series 5, and X5... are also being discounted by Truong Hai in various ways, with the highest discount being 50% off registration fees.

Is the market eagerly awaiting stimulus policies?

According to assessments, the Vietnamese automotive market is currently experiencing an oversupply and high inventory levels. This is why manufacturers are competing to launch promotional programs and offer significant discounts to clear their stock. However, sales are still declining, and the market will likely continue to face difficulties in the coming months. Consumers are waiting for new models, more attractive promotional programs from manufacturers, and policies to "rescue" the market.

"As always, when the market is sluggish, customers tend to wait for breakthrough policies to boost sales. The policy of reducing registration fees has been applied many times, and the most recent one ended at the end of December 2023, so it seems consumers are hoping the government will introduce a new policy," said Mr. Nguyen Manh Tien, manager of a Hyundai showroom.

Recently, in Prime Minister's Directive No. 12/CT-TTg on key tasks and solutions to promote socio-economic development, the requirement reappeared that "the Ministry of Finance should urgently research and propose to the Government and the Prime Minister in May 2024, on extending the deadline for tax payment and reducing registration fees for domestically produced and assembled automobiles."

Mr. Tien stated that if this policy is implemented, domestically manufactured and assembled cars will continue to receive a 50% reduction in registration fees. The implementation period could be in the second half of 2024. Therefore, customers intending to buy cars during this time will likely pause to observe and wait. Consequently, the automotive market will remain unchanged for the time being.

Notably, Mr. Tien believes that if the government approves the fourth reduction in registration fees, it will not only impact domestically assembled and manufactured cars. This will be a major boost for the market in general because when domestically produced and assembled cars receive incentives, imported models will also receive other incentives to compete. Furthermore, in the coming period, many car manufacturers will also launch new models, which could lead to a resurgence in the automotive market.

Source: https://baophapluat.vn/thi-truong-o-to-tram-lang-post512285.html