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Auto sales fall 41 per cent in first half

Update: July, 12/2012 - 10:44


HA NOI — Automobile sales in Viet Nam fell an historic 41 per cent year-on-year in the first six months of 2012, an industry group said yesterday, slowed by the economic recession.

Total vehicle sales for the first half reached just 42,928 units, the Viet Nam Association of Automobile Manufacturers (VAMA) said in a statement.

While car sales fell by 47 per cent to 16,305 units, sales of trucks also slipped 30 per cent to 26,929 units.

In June, 6,444 vehicles were sold, down 43 per cent over the corresponding period last year, and 4.6 per cent compared to the previous month, it added.

According to VAMA's chairman Laurrent Charpentier, auto sales for the year were projected to hit around 80,000 units given the slow start.

The Ministry of Industry and Trade in April also forecast that Viet Nam's total car sales in 2012 would drop drastically and return to 2007's level of some 80,000 units.

Last year, sales reached 138,000 units, a drop of 5 per cent compared to the previous year.

Encouraging signs

However, in a statement sent to the media yesterday, VAMA said: "It is a very encouraging sign that the Government and the Ministry of Transport are revising their position with regards to the new set of fees they had planned to implement."

The statement came after VAMA received a letter from the Ministry of Transport (MOT) last week in response to an invitation from the association to meet and discuss the series of fees the ministry is working on.

The ministry earlier this year proposed car ownership fees under which each car owner would have to pay from VND20-50 million per year in a move to try and restrict rising car numbers that cause chronic traffic congestion.

However, the letter from the MOT stated that it would be looking into the matter further and taking advice from relevant ministries as well as public opinion before making a final decision.

"The letter may signal a better sales outlook for 2012," said Charpentier.

VAMA in March asked the Government to postpone the implementation of a series of car fees initiated by the MOT, saying the Government should first build a policy to develop and diversify the transportation network.

If the proposed fees are applied, it will be impossible to achieve the Government's auto development plan toward 2020, which is regarded as a pillar of the country's economy.

Then Viet Nam will have to spend approximately US$12 billion per year on car imports, which will negatively effect the trade balance, VAMA says.

The recession in the local auto industry will also dim the annual contribution of the sector to the State budget, which is estimated at US$2 billion annually. — VNS

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