HA NOI — Used-car traders are suffering tough times due to overwhelming supply.
"The market seems to be frozen with thousands of sellers and no buyers," said NguyenVan Long, director of the Bao Long Auto in the capital.
"Since the Ministry of Transport proposed personal vehicle fees, many people decided to sell their cars. In only one morning, 100 vehicle owners visited our office wanting to get rid of their cars."
Other used-car traders confirmed that from the beginning of this year, most customers had wanted to sell their cars instead of buy new ones.
The traders estimate that demand declined by around 50 per cent.
Director of the Hoa Binh Auto Salon Nguyen Ngoc Anh said that his salon had managed to sell only one car a day and sometimes not even that.
Even companies have been selling off their vehicles.
Explaining the reason, traders said personal vehicle fees were not the only reason.
"Difficult economic conditions have had a large impact. With monetary policies tightening, about 80-90 per cent of consumers have been unable to take out loans to buy cars," Anh said.
Due to oversupply, second-hand car prices have declined by about 10 per cent.
"The price of a luxury car used to be about VND50 million [US$1,800] cheaper while cheaper vehicles cost about VND30 million [$1,400] less," Long said.
He predicted that even though sellers were currently ready to cut prices by VND100 million ($4,7000) to make a sale, the situation would only get better next year.
"While those with low- to average-incomes worry about the new fee, the more affluent care very little."
Nevertheless, Long said the fee would become a serious problem if it was millions of Vietnamese dong.
If the proposal is approved, each owner will have to pay about VND70 million ($3,300) per year. — VNS