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Economic downturn slows auto sales

Update: February, 04/2012 - 09:02


Customers shop at an auto showroom in the capital city. The number cars imported to Viet Nam in the first month of the year fell by nearly 50 per cent against the same period last year due to the global economic slowdown. — VNS Photo Truong Vi
HA NOI — Viet Nam imported 3,000 complete built unit (CBU) automobiles worth US$45 million last month, a 49.8 per cent drop in volume and a 55.1 per cent fall in value from January 2011, according to the General Statistics Office (GS0).

The number of imported CBU's matches last August's record low.

Industry insiders attributed the fall to economic difficulties, high lending interest rates and strict regulations on import procedures.

"The automobile market in 2012 will have no room for unofficial and small car importers," owner of Ha Noi Auto Company Nguyen Van Dung told Viet Nam News.

Circular No 20 released last May by the Ministry of Industry and Trade aims to re-establish order in the car import market. Officials believe it will put an end to car imports by unauthorised companies.

Analysts have noted that private car dealers have no other option but to shift into the used car business or change fields entirely, giving the playing field over to genuine sales agents selected by manufacturers.

"I have to sell all of my cars at discount prices and turn my auto showroom into a restaurant," said Dung, who has been selling imported luxury cars for more than 10 years.

Dung has changed the name of his 200sq.m car showroom in Gia Lam District from Ha Noi Auto Company to Ha Noi Beer Auto Restaurant.

The decision by authorities in Ha Noi and HCM City to increase the car ownership registration tax by 5 per cent also attributed to the fall in CBU imports.

The country spent more than $1 billion on 55,000 imported new cars in 2011, up 2.1 per cent in volume and 4.2 per cent in value against the previous year. — VNS

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