How will the auto market evolve after the end of the registration fee reduction policy?

The auto market has seen new developments after the policy of reducing 50% of registration fees. (Photo: PV/Vietnam+)

From December 1, 2024, the policy of reducing 50% of registration fees for domestically assembled cars officially ends. The registration fee for cars will return to the level prescribed in Decree 10/2022/ND-CP and related legal documents.

As the preferential policy expires, the Vietnamese car market has begun to see new developments. According to records, many dealers and car manufacturers have launched and increased discount incentive programs to compensate for the policy gap in the context of entering the last month of the 2024 calendar year.

Recently, Toyota Vietnam (TMV) and its dealer system announced the implementation of a December promotion program for a series of its car models. Notably, customers who buy the two models Veloz Cross and Avanza Premio will receive 100% support for registration fees from the manufacturer. This incentive level is double that of the previous month and is equivalent to the old support level from the government . Converted to cash, the Veloz Cross model is reduced by a maximum of 64-66 million VND, while the Avanza Premio is 56-60 million VND.

Other models including Vios, Yaris Cross and Corolla Cross petrol versions are offered a 50% reduction in registration fees, converted to cash, Toyota Vios is reduced by 23-27 million VND, Yaris Cross from 33-38 million VND and Corolla Cross up to 41 million VND. In addition, customers also enjoy preferential loan interest rates from 5.99%/year (for Grab or Be technology driver customers, interest rates are from 1.99%/year).

TMV representative said that with the above incentive program, after the Government's registration tax support policy for car models, there will still be the opportunity to own a car with registration fee support. This is TMV's effort to bring customers the opportunity to own a car more easily at the end of the year.

On this occasion, Honda, a fellow carmaker, also reduced the registration fee by 50% for a series of its models, including the City, HR-V G version and BR-V L version, with the conversion ranging from 26-35 million VND. The D-size sedan Honda Accord in particular will receive a "huge" cash discount of 250 million VND, bringing the price down from 1.319 billion to 1.069 billion VND. This is the deepest discount the company has applied to the Honda Accord in 2024. This discount and promotion will be applied by the company from December 6, 2024 to January 28, 2025, before the Tet holiday.

From now until the end of the year, the American car company - Ford has also launched many attractive business policies for consumers. Accordingly, the company has announced a direct reduction of 40 million VND in the listed price of the Territory model to only 759 million VND. This is a move by the company to maintain the growth of this model as well as put pressure on the Mazda CX-5 - the king of sales in the B-size SUV segment.

It is expected that Ford Territory's sales will fluctuate when it is reduced to only 759 million VND. (Photo source: Ford Vietnam)

Many other car models have also been adjusted down, such as Explorer reduced by 100 million VND to 1.99 billion VND; Everest reduced from 15-54.95 million VND depending on the version, Ranger pickup truck reduced from 21-39 million VND...

Some experts believe that it is reasonable for dealers to make deeper price cuts on many car models because the auto market is in its final stages, and there needs to be a business policy to fill the gap left by the 50% reduction in registration fees. In addition, this is also the peak shopping season at the end of the year, when consumers tend to shop more before the Lunar New Year.

“With the additional discount program, the total cost of buying a car can be approximately equal to the reduction in registration fees from the Government. Customers still have the mentality of saving a large amount of money, thereby helping to maintain purchasing power,” said Van Hoi, an expert in the car industry.

However, Mr. Hoi also said that the price reduction is only effective at the moment. Sales are expected to gradually decrease, especially for domestically produced models because consumers have taken advantage of buying cars during the preferential period. In addition, the amount of unsold cars is still a big problem for domestic automobile manufacturers.

According to the General Statistics Office, in the first 10 months of 2024, the output of domestically produced and assembled cars reached 281,400 units, an increase of 12.1% over the same period in 2023; while imported cars were estimated at 143,084 units, an increase of 37.8%. The estimated supply for the car market in the first 10 months of 2024 reached 424,484 vehicles of all kinds. Combined with more than 60,000 vehicles in inventory from 2023, the total supply of cars reached nearly 500,000 vehicles of all kinds.

Large inventory is a challenge for car manufacturers. (Illustration photo: PV/Vietnam+)

Meanwhile, according to business estimates, total car sales in the 11 months of 2024 of the whole market will reach about 380,000 vehicles of all types. Supply is still about 100,000 vehicles higher than demand.

Many businesses revealed that the inventory of cars from the previous year has not been sold out yet while the policy of reducing 50% of registration fees is only applied for a short time. This forces car manufacturers and dealers to continuously implement deep incentive programs to compete to push inventory.

On the dealer side, Mr. Nguyen Tien Dung, General Director of Hyundai An Khanh shared: "In the last days of applying the reduction in registration fees, the number of customers has decreased sharply. In the final stage of 2024, we also prepared incentive programs, but this year it is difficult to expect an improvement."

In addition, in the coming time, domestic manufacturing and assembling enterprises will also face many difficulties when having to compete fiercely with imported cars and many new models and upgraded versions are continuously launched. To maintain market share, balancing supply and market demand, along with flexible business strategies, will be the decisive factors for the future success of car manufacturers.

Source: https://baodaknong.vn/thi-truong-oto-dien-bien-ra-sao-sau-khi-het-chinh-sach-giam-le-phi-truoc-ba-236274.html