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Car market pale because of … banks
The sharp falls of car sales have been attributed to several reasons. Besides tax and ownership registration fee increases, car manufacturers have also blamed slow sales on banks tightening loans.
The car market has been gloomy since April 2008, when car part taxes increased by 5-10%. However, purchasing power did not see a sharp decrease until May.
Car sales saw more dramatic decreases in July, August and September. In July, the sales of the members of the Vietnam Automobile Manufacturers’ Association (VAMA) dropped to 8,458 units. They continued to drop to 7,809 units in August.
Sales then plummeted dramatically to the abysmal depth of 5,180 units in September, the deepest low since the beginning of the year.
It also happened that during this time, the credit growth rate in general, and consumer credit growth rate in particular, was at a low level.
In July, August and September, the credit growth rate of the banking system dropped to 0.7-0.9%. In the first nine months of the year, the credit growth rate just reached 18.03%, much lower than the 30% of the same period of last year.
A credit officer of SeABank in HCM City said that the bank has not been providing loans to fund car purchases for the last few months. Meanwhile, the bank is considered a pioneer in funding consumer purchases.
Analysts have pointed out that consumer credit always has big impacts on the car market as this decides the demand and the payment capability of people.
Dr Udo Loersch, Chairman of VAMA, believes that the tightened credit is the main reason behind the sharp fall of the domestic car market.
Duong Kim Thoa from Hanoi-based Dong Hai Automobile Company said that the inaccessibility of bank loans has led to purchasing power down by 50%.
However, there are signs that banks will resume consumer credit, including funding car purchases in installments, which has sparked the hope that the domestic market will recover in the time to come.
TBKTVN
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