Used car market faces more difficulties

October 28, 2023 - 11:34
The introduction of a multitude of new car models coupled with significant discounts has intensified the challenges faced by the already struggling second-hand car market.
A used car showroom in Hà Nội. — Photo

HÀ NỘI — Many car manufacturers have recently unveiled new car models, offering significant discounts to boost consumer interest, further complicating the already challenging second-hand car market.

Over just the latter half of September, the Vietnamese auto sector has seen the introduction of over 10 brand-new car models from various brands, comprising both internal combustion engine vehicles and electric ones.

Automakers are persistently enhancing their offerings to provide customers with the latest and most advanced vehicles. Due to technological advancements, these newly launched models come with numerous exceptional features, catering to the growing demands of consumers.

Besides rolling out entirely new models, several manufacturers have also revised the price tags of their new cars, ranging from a few tens of millions of đồng to VNĐ534 million (US$22,250).

Hyundai Thành Công has revised the prices of two of its car models, the Santa Fe and Tucson, with a maximum reduction of VNĐ191 million.

Honda is offering price cuts that equate to 100 per cent of registration fees. Toyota is providing a 50 per cent subsidy on the remaining registration fee for customers purchasing Vios cars.

Volkswagen is offering support by covering 100 per cent of registration fees, up to a cap of VNĐ400 million. Mercedes-Benz is giving a discount equivalent to 50 per cent VAT on the retail price for most of its models, which brings down the car prices ranging from VNĐ76 million to as much as VNĐ534 million for the G63.

Used car market difficulties

The introduction of a multitude of new car models coupled with significant discounts has intensified the challenges faced by the already struggling second-hand car market.

As a result, numerous car owners and dealers in the used car sector have been forced to make significant reductions, yet they still struggle to attract buyers.

A variety of factors contribute to the challenges in the used car market. However, a primary issue has been the intricate procedure for transferring used car titles (implemented from August 15, 2023) that can span several months, dampening consumer enthusiasm.

Nguyễn Hoàng, who runs a second-hand car showroom on Trương Công Giai Street in Hà Nội, told the Vietnam News Agency that from August 15, 2023, the identification plate number would be officially governed by Circular 24/2023/TT-BCA, which pertains to the issuance and revocation of vehicle registration and number plates. This development had led to a downturn in the used car market, making operations even more challenging.

In the past, transferring names and changing licence plates for customers only took a few days or at most a week, even for vehicles from out of province, said Hoàng. Thanks to that, each month his facility sold several dozen cars.

However, since the circular took effect, the process of revoking licence plates and registering and completing procedures for customers had taken longer.

Sometimes it took several weeks or even more than a month to complete. This made customers impatient to wait to buy used cars, leading to a sharp decrease in car sales compared to before.

Meanwhile, Mạnh Hùng, a used car dealer on Nguyễn Chánh Street, Hà Nội, said that the used car market was facing not only the recall of identification number plates but also difficulties due to general economic difficulties.

With new car prices frequently being promoted and discounted, consumers were less inclined towards purchasing second-hand cars. As a result, the used car trading sector had seen a drop of roughly 20-30 per cent since before August 15.

Spokespeople from several second-hand car businesses had voiced their hopes for regulatory bodies to introduce suitable regulations that would facilitate the process of transferring used car titles.

Such measures would enable prospective buyers to undergo the procedure more swiftly and effortlessly, potentially aiding in the revival and growth of the used car market, they asserted. — VNS