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Cars a seller’s market as makers caught napping
Car dealerships in Hanoi are making good money as automakers who had ramped down output amidst the economic downturn struggle to meet an unexpected surge in demand.
Nguyen Minh Hung, a resident of Thanh Xuan District has just found out that buying a new car was not so easy as he had thought.
“It’s absurd that I am the customer, I have enough money but I have to beg to get a car,” he said as he stood at a Toyota dealership in Cau Giay District.
All Toyota, Honda and Ford dealerships in Hanoi told Thanh Nien they were no longer receiving orders for August delivery.
Customers who want to buy a Camry 2.4 or a Corola Atlis 1.8, two of the more popular Toyota models in Vietnam, have to wait until the end of the year.
Meanwhile, the order book this year for Corola Atlis 2.0, a new model launched last month, is already full, dealers said.
GM Daewoo and Kia models are slightly less sought after but customers still need to wait for several months after making their deposits.
A sales executive of Toyota Vietnam, who wished to be unnamed, told Thanh Nien dealerships do not have enough cars to sell because manufacturers have scaled back production and reduced imports since early this year amid the economic downturn.
Now that the car market is recovering sooner than expected, manufacturers will need some time to ramp up output, but they will do so, the executive said.
As waiting lists at dealerships around Hanoi get longer, sales agents are making offers for immediate delivery on extra payment.
The popular offers made by dealerships are: “Pay us another US$2,000 and you’ll get the slot to buy the car now;” or “A customer ordered a fully equipped car but he didn’t pick it up, so we can sell it to you now if you pay another $4,000.”
As dealerships refuse to specify a delivery date for customers, the order in their waiting lists can theoretically be changed.
Economist Nguyen Minh Phong said car dealerships are taking advantage of the current shortage of cars “to wring money from customers.”
Carmakers have indeed earned a lot from more than 10 years of preferential policies aimed to develop the auto industry, but right now it is car dealers who are making the biggest profits from the local market, Phong said.
Car sales in the first half of 2009 dropped 30 percent from a year earlier to 48,000 vehicles, the Vietnam Automobile Manufacturing Association said last week.
However, June sales at 16 car makers operating in Vietnam only fell 1 percent from a year earlier to 9,699 units after the government halved value-added tax on cars to 5 percent and slashed registration fees to 5 and 6 percent, the association said in a report.
Japan’s Toyota Motor Corp. held on to its top position in the Vietnamese market, with its six-month sales down 13 percent to 10,907 vehicles.
Industry insiders said the car shortage could last for several months as customers want to take advantage of the low value-added tax on cars and registration fees, which will remain in effect until the end of the year.
Moreover, as the ban on car purchases by government agencies was lifted July 1, the demand for cars is expected to surge soon.
Vietnam’s car sales rose 37 percent to a record 110,000 units last year, but a major slowdown has prevented a repeat performance so far this year.
The economy is improving, Prime Minister Nguyen Tan Dung had said in a statement posted last month on the government’s website that called for efforts to top a 5 percent growth target. The target was revised earlier this year from an initial goal of 6.5 percent.
Xuan Toan
thanhnien
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