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Car sales in 2012 heading for a crash: MoIT
Vietnam’s total car sales in 2012 will drop drastically and return to 2007’s level, according to the Ministry of Industry and Trade (MoIT).
The forecast is based on the seasonally adjusted annual rate ( SAAR ), when only 6,982 cars were sold in April, a 24 per cent drop over the previous month and 46 per cent fall against the same period last year.
It is estimated that only 81,000 cars will be sold in the country by the end of 2012.
According to the MoIT, car manufacturers and assemblers are taking measures to cut down production levels due to increasingly bigger stockpiles. The distribution network is also struggling with the back log.
On top of this, customers are becoming much more careful when buying a car due to the gloomy economic outlook, high registration fees in Hanoi and Ho Chi Minh City and high interest rates.
For the market to recover, it is necessary for manufacturers and assemblers to cut costs and reduce car prices. However, policies to reduce value add tax and luxury tax are also essential, the MoIT said.
The MoIT is to ask the government to apply preferences to products that contain a high level of domestically produced spare parts.
According to statistics released by the Vietnam Automakers Association, Vietnam sold 138,000 cars in 2011, a drop of 5 per cent compared to the previous year.
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