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Car market: there are tens of thousands of sellers, tens of buyers
Unable to sell products, used car dealers have been pushed against the wall.
Ha Minh Tuan, General Director of Anvcar Vietnam, specializing in trading used cars, said that since the beginning of 2012, the number of used car buyers has dropped dramatically, while the number of car sellers has increased rapidly, thus putting car dealers in big distress.
Tuan said that it’s now the time people spend their money on food and essential goods instead of houses or cars, because they have to cut down spending to survive the high inflation. Some clients still ask to buy the used cars worth 300-500 million dong, while no one seeks for valuable cars worth 700 million dong and more. It is estimated that the number of clients has dropped by 50 percent.
Also according to Tuan, previously, the supply of used cars was very short. But things now are quite different. A lot of people sell their cars, which has led to the more profuse supply. However, it’s very difficult to find buyers at this moment.
The car sellers are both individuals and enterprises. In the current economic difficulties, they have to cut down spending and they have to sell cars. It is estimated that car owners have to spend 5-10 million dong a month on a car--a relatively high sum of money.
Meanwhile, enterprises sell cars to get money to pay debts, to pay to workers. I many cases, they sell cars because they have stopped operation.
As the supply increases rapidly, the used car prices have fallen sharply. According to Tuan, before Tet (January 2012), a Hyundai Sonata 2010 version with mileage of 30,000 kilometers, could be sold at 900 million dong. Meanwhile, the sale price has dropped to 820 million dong. A Hyundai Santa Fe 2010, which was priced 950 million dong in the past, now is offered for sale at 850 million dong.
“In general, used cars have seen the prices plummet by 5-10 percent,” Tuan said.
Nguyen Van Cu, Lang Ha and Le Van Luong streets in Hanoi were known as the streets of auto salons, which mostly sold brand new cars. However, the salons now only have used cars available.
Nguyen Van Bach, an officer of a used car shop on Pham Hung road, said that several months ago, used cars were in short supply. However, used cars have become as unsalable as brand new cars.
“The policy on road maintenance fee would be applied as of June 1. The Ministry of Transport has also suggested many other kinds of fee. The fees and charges would kill car dealers,” Bach said.
He went on to say that many people rush to sell cars after hearing the information about the fees. Meanwhile, other people have delayed their car purchase plan to listen to the news. As a result, the market is getting gloomy.
In the past, a car shop could sell tens of cars a month, while it now can sell several cars only. Some cars dealers spent big money to buy cars before Tet, hoping that they would make profits while reselling them. However, their plans have failed completely. Unable to sell cars, dealers do not have money to pay retail premises rent, and workers’ salaries.
“Even when we offer discount of nearly 100 million dong and sell cars at a loss, we cannot find buyers,” Bach complained.
Currently, car shop owners do not make definitive purchases for conveyance to others, but they only take goods on consignment and collect fees from sellers. If car dealers can sell cars, they would get commission, and if not, they would still have fees to cover expenses.
Tran Thuy
vietnamnet
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