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Major car sales anticipated   2008-11-24 - Viet Nam Net

Sustaining the same fate as the world’s automobile industry, automobile manufacturers in Vietnam have been weeping as they cannot sell products. Meanwhile, experts have forecasted big car sales in the near future.


The Vietnam Automobile Manufacturers’ Association (VAMA) reported that the 5,679 cars were sold by VAMA’s members in October 2008, an increase of 499 units from September 2008, but a decrease of 26% over the same period last year.


However, experts still have doubts about the figures provided by VAMA. Some sources said that the number of cars sold was much lower than the announced figure and the overstocks prove to be very big.


Vietnamese-owned Vinamotor, for example, has the 10,000 different types of vehicles in stock. Tran Ba Duong, General Director of Truong Hai Automobile Joint Stock Company, said that the manufacturer has in stock approximately 4,000 units, including 1,000 Kia brand-name units. Xuan Kien has also reported having 1,500 units in stock.


Foreign-invested automobile manufacturers have not revealed any figures regarding their overstock, but sources have said that each of them has between 300-1,000 units in stock. Some manufacturers have to hire storehouses to keep unsold vehicles.


Honda Vietnam is now thought to have 1,000 Civics in stock and the sale volume in November is proving to be very low. Some sources have said that the manufacturer has sold only 50 Civics so far this month.


Automobile manufacturers said that the demand for vehicles has decreased by 30-50% in the last months of 2008, as a result of the difficulties in the national economy.


Big sale-off?


Experts said that enterprises that do not want to keep big stocks will have to offer big sales to clear the stocks.


In fact, some manufacturers have reduced sale prices recently. GM Daewoo, for example, has slashed their prices three times, totaling $3,000 less per unit for the Captiva model.


On November 18, Euro Auto announced sharp price decreases for 7 out of 10 car models. Truong Hai has also slashed the prices of some Kia models. Kia Morning, for example, has reduced by $300-500/unit, while Kia Sorento, with an oil engine, has decreased by $3,000/unit.


2009 is believed to be a more difficult year for automobile manufacturers than 2008. The main customers for car manufacturers are businesses and high-income earners. However, as a result of the economic growth slowdown, the demand for cars is forecasted to see sharp decreases.


Meanwhile, as of April 1, 2009, when the amended luxury tax law becomes effective, car models with less than nine seats will have to bear new tax rates higher than those currently applied, which will make car prices more expensive by 5-7%.


Automobile manufacturers have built up the production plans for 2009, and some of them have decided to cut the output by 50% over 2008.


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