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Half of auto dealers may disappear
Car dealers have slashed prices repeatedly, but they still cannot find buyers. The dealers admit that they are facing their most difficult business period ever. Some speculate that up to fifty percent of dealerships may close by the next quarter.
The Director of a large HCM City import car company complained that he sold just two cars in all of April. During the same month last year, he sold 30-40 cars.
His company now has 130 cars still unsold and he must ponder how to clear out this large stock volume to obtain enough revenue to pay bank debts.
“The only thing I’m thinking about now is how to sell the cars,” he acknowledged. “And I know that other car dealers are facing the same problem. If the situation cannot be improved, at least 50 percent of car dealers will go bankrupt in another month.”
Pham Huu Tam, Director of Tradoco, sold tens of cars this time last year, but now he is selling only two or three cars a month. Even though his company promises to cover car ownership registration tax and has cut prices, his business is still in trouble.
A Hanoi car dealer explained that it is very difficult to sell cars now because buyers have too many choices, thanks to the big imports.
According to other car dealers, there are two main reasons for the downturn in the car market: tightened credit and economic difficulties. Analysts had predicted that car sales would go well, reasoning that people would rush to purchase cars before car ownership registration taxes increase. Instead, the market has become deadly still.
“We have slashed prices by 20-30 million dong per car, but we still cannot find buyers,” a dealer complained.
Hoan Cau Car Company Director Pham Minh Tuan revealed that his company has been selling just three cars a month. The company has decided to change its business strategy and will focus on trading medium-class cars priced at between $17,000 and $50,000, instead of import or luxury cars.
Auto dealers believe that the market will continue to stay quiet for at least another quarter and that approximately 30-50 percent of dealers will be eliminated by the difficulties.
According to the General Department of Customs, car imports have been decreasing significantly so far this year as the result of the policy on restricting the trade deficit. In February and March 2010, Vietnam imported 5800 cars, half that of the same period last year.
The Ministry of Industry and Trade has added cars to the list of import restrictions. The General Department of Customs has also put autos on the list of goods that need to be tightly controlled. Meanwhile, the Ministry of Finance has announced plans to raise the ownership registration tax to 15 percent in some areas.
vietnamnet, VnExpress
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