Why Many Vietnamese People Are Not Buying Cars at the Beginning of the Year
The automobile market in Vietnam has seen a significant decline in sales at the beginning of this year. According to a report by the General Statistics Office, in February, a total of 21,900 new cars, including domestically manufactured and imported vehicles, were added to the market. This number represents a 23.3% decrease compared to January 2023 and a staggering 38.8% decrease compared to the same period last year.
Low Domestic Production
The number of domestically manufactured and assembled cars in Vietnam reached an estimated 15,900 units. This represents a decrease of 26.4% and 25.3% compared to January 2023 and the same period last year, respectively. It is important to note that this is the lowest production volume in recent years. In the first two months of the year, the total number of cars manufactured in Vietnam was 37,500, a 9.8% decrease compared to the same period in 2023.
Decline in Imported Cars
In February, the number of imported cars reached only 6,000 units, with a total value of 117 million USD. This represents a 13.7% decrease in volume and a 19.3% decrease in value compared to the previous month. Moreover, this volume has decreased by 51.3% and 54.9% in terms of volume and value, respectively, compared to the same period last year.
Reasons for the Decline
Experts in the automobile market attribute this decline to the overlap with the Lunar New Year holiday in 2024, during which many businesses and factories were closed. However, the significant drop in new vehicle supply suggests that companies will continue to face challenges in stimulating consumer demand.
Additionally, the government’s policy to reduce the vehicle registration fee by 50%, which came into effect at the beginning of 2024, may also impact the sales of domestically produced cars. In fact, the Vietnam Automobile Manufacturers Association (VAMA) reported a significant decline of 50% in vehicle sales in the Vietnamese market in January 2024 compared to December 2023.
“Clearance Sale” Strategy
In response to the current market conditions, car manufacturers are focusing on “clearance sales” of their existing inventory from 2022. One German car manufacturer with a factory in Vietnam has reduced car prices by nearly 700 million VND.
Customer Preferences and Incentives
According to a salesperson at a Japanese car dealership in Dong Da district, at the beginning of the year, customers tend to prioritize investments rather than purchasing cars. To stimulate consumer demand, car manufacturers and dealerships offer promotions and discounts. This particular dealership has reduced prices by 20-50 million VND for many sedan and multi-purpose vehicles. However, despite these attractive offers, the market remains relatively stagnant as people are not enthusiastic about buying cars at this time.
In conclusion, the decline in car sales at the beginning of the year in Vietnam can be attributed to several factors, including the holiday season, changes in government policies, and consumer preferences. Despite efforts to stimulate sales through discounts and promotions, the market is still facing challenges in attracting buyers. For more information on business and economic news, visit Business Today.