Due to the great supplies and inventories, the car prices may remain low until the Lunar New Year.
It seems that the car prices are remaining the same without any sign of increasing. Some brands even continue their new discount programs. Due to the great supplies and inventories, the car prices may remain low until the Lunar New Year.
1. Redundant cars, growing discounts
Due to the low demands and the great supplies, companies continue to launch new discount programs even though the ghost month has passed.
Toyota Vietnam has just announced their nationwide special offers for Corolla Altis, taking effect from 3rd – 30th September, and Fortuner, Innova, taking effect from 3rd September – 31st October, including the 50% discount on the registration fee, and the 40-million endow, etc. Moreover, potential buyers of some other car models which are not included in the discount program, such as Vios, Yaris, Wigo, can still enjoy the 30-40 million VND discount based on the car version.
Nissan Vietnam maintains many “great” discount programs for various car models in September. Notably, Nissan Terra and X-Trail still provide the 90 million VND discount in cash. Buyers of other models such as Nissan Navara and Sunny still enjoy the 30-million VND discount.
For Mazda, the Mazda 3 and Mazda 2 model still provide the 40-70 million VND discount, depending on the version, comparing to the announced prices.
Car models of Honda Vietnam, such as Honda City, also have discounts of up to 30-35 million depending on the version while the Honda Jazz enjoys a discount of 75 million VND.
In the A-class segment, the Hyundai Grand i10 models are being sold at a discount of VND 20-40 million compared to the announced price, while Kia Morning also decreases from VND 10-30 million depending on the version.
In the small Crossover segment, the standard Hyundai Kona version is still priced at 605 million VND, a discount from the ghost month, while the EcoSport of Ford Vietnam has a discount ranging from 50-73 million VND.
The majority of car models sold prices remain the same, unchanged from the price in the lunar July. Even though there are some increases, but they are not notable, ranging between 5-10 million VND, and are much lower than the announced price.
Regularly, the end of the ghost month would lead to the high demands of cars, which would increase gradually towards the end of the year. However, the demands this year remain low, resulting in the difficulty in selling cars. “Based on the fact, we’ve decided to keep the sale prices the same”, the director of a Huyndai sales agency said.
The fail attempt to increase car prices can be explained by the great car supplies. According to the figures from the General Department of Customs, the total imported complete built-up cars in August 2019 increased strongly compared to the same period last year, reached 96,000, increasing by 229%, and valued at 2.1 billion USD, increasing by 205.6% over the same period last year.
Altogether, the supplies of domestically-assembled cars also increased. The Vinfast car factory started its operation with the capacity of 38 cars/hour, with 3 new car models; Toyota Vietnam reassembled the Fortuner model; Thaco Truong Hai had the new Mazda CX-8 and CX5 models, while Hyundai Thanh Cong still had a high capacity, etc. All of these are reasons for the great car redundancy.
2. The prices will be low until the Lunar New Year?
The great supplies put major pressure on car brands, forcing them to lower their prices to hold their market share and compete with their opponents. Due to this race for the market share, lots of agencies have complained that their operation didn’t bring any profit and they even suffered from losses, including the case of the X-Trail model of the Nissan Vietnam agencies with the loss of 20 million VND, or the case of the Mazda company, which suffered from losses caused by the discounts of 50-60 million VND, and some even reached 120 million VND. The agencies of Toyota was a little bit luckier as after selling Altis, Vios, and Wigo, they still broke even.
Estimations have shown that from now until the end of the year, it would be challenging for car prices to increase due to the demands still being great. According to the Vietnamese Car Manufacturers Association, the car market in the first 8 months of 2018 increased by 20% over the same period, which was a high level. However, there were still a lot of redundant cars. Many companies still have redundant cars from the beginning of the year, therefore it will be difficult for car prices to increase from now until the Lunar New Year.
Besides, automobile import regulations are expected to change in a more open way, cars can be imported in large quantities and lower costs will help reduce car prices. Some companies said that if we replaced the current batch-inspection regulations with the model-inspection regulations, the number of imported cars to Vietnam might reach more than 15,000 per month, the majority of which would come from Thailand and Indonesia. Due to the lowering prices of imported cars due to the great supplies, domestic cars will also have to lower their prices if they want to compete with them.
Therefore, from now until the end of the year, it will be difficult for car prices to rise. The car prices will only rise if the proposal for the increase of the special consuming tax of authorities take effect. If that happens, the prices of imported cars are sure to rise. However, the chance of this happening is pretty slim in 2019, as companies will continue to announce new car models together with the attractive special offers to raise the customer demands.