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Auto market stalls, needs kick-start
Repeated recalls by many famous automobile manufacturers have made Vietnamese car dealers suffer as sales of imports has been very slow.
Trinh Vinh Ha, Deputy Director of Son Tung Auto, which specializes in selling imports, admitted: “We have been sitting idle since Tet.”
The showroom sells one or two cars a week at most, and 3-4 cars a month. Compared to late 2009, when Son Tung showroom delivered 3-4 cars a day to clients, their car sales have stalled.
Recalls hurt sales
The most sellable models now are used Audi A4s and A5s priced at $78,000, plus Lexus LX350, on which import tariffs have declined from 81 to 77 percent
Meanwhile, hot models of 2009, such as Camry or Lexus GX 640, now cannot be sold. Even Venza, worth a little over $60,000, is selling very slowly. Many people purchased Venzas in late 2009, so now the model is less appealing.
Ha predicted that many Toyota models will not be imported until August or September 2010, especially since Vietnam has stopped granting registration certificates to recalled models.
“The latest news is that Lexus GX 460 also has problems. Therefore, we will not import it anymore,” he confirmed.
Explaining the slow sale of luxury cars, Trung, the manager of Nam Trung Auto, cited how consumers, even “big guys,” must now think twice about spending large sums on luxury cars during the economic downturn.
“Many buyers of luxury cars pay by installment,” Trung observed. “However, banks have tightened credit and many have stopped funding car purchases, so consumers do not have the money to purchase luxury cars.”
Tuan, a car dealer, agrees, maintaining that few luxury cars have been imported this year. “Only several Mercedes Benz, BMW were carried to Vietnam in March,” he revealed.
Too many cars in stock
Medium-class cars priced below $50,000 are selling better than luxury models.
Yet even these sales are not at satisfactory levels.
Autos from South Korea have even increased prices. Hyundai I30, for example, has seen the price increasing by $1000-1500 to $32,000-33,000, while Kia Forte has increased by $1000-2000.
HG Auto reported that they sold 60 South Korean cars in the first quarter of 2009 with just two showrooms. The car company has sold only 30 in the first quarter of 2010, even though they now have four showrooms.
According to Tuan, many dealers are still selling cars imported in 2009, and many have cars left unsold over the last 3-4 months.
Tuan estimated that some showrooms have 30-40 cars unsold, while others have around 10 unsold cars, but these leftovers are luxury autos whose total value may reach $500,000-600,000.
New fees welcomed
Hanoi authorities are considering a new car registration tax, which has brought new hope to car dealers.
The city may raise car ownership registration tax from 12 percent to 15 percent and also raise fees for license plates by ten-fold from 2 million dong to 20 million dong.
If the plan is approved, people will rush to purchase cars before the new regulations are applied, which may just be the jumpstart that the car market needs.
Pham Huyen
vietnamnet
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