Auto prices slashed further

September 16, 2017 - 10:14

Many car manufacturers in Việt Nam continue to apply discounts and promotions to stimulate purchasing.

Many car manufacturers in Việt Nam continue to apply discounts and promotions to stimulate purchasing.— Photo

HÀ NỘI — Many car manufacturers in Việt Nam continue to apply discounts and promotions to stimulate purchasing.

Insiders say slashing auto prices is reasonable in light of next year’s zeroeing-out of import tariffs from ASEAN member states. Along with inventory pressure, this has led manufacturers to cut back on profit to encourage consumption.

After announcing a reduction of hundreds of millions of đồng for Honda CR-Vs, a run on the dealerships emptied out their stocks. In one month, the prices of luxurious SUV Honda CR-V 2.4 ATTG model, CR-V 2.4 A.T and CR-V 2.0 A.T have been dropped by VNĐ280 million, VNĐ330 million and VNĐ220 million, respectively. This has made way for the new model of the imported seven-seat CR-V series at nearly the same price as CR-Vs assembled in the country, without a discount (about VNĐ1.1 billion).

Mitsubishi Motors Việt Nam (MMV) will continue to offer car price incentives this month of as much as VNĐ180 million (depending on the model).

Trường Hải Auto Corporation (Thaco) also announced a price reduction of the Mazda CX-5 to less than VNĐ800 million, down about VNĐ200 million compared with previous months.

Jumping on the bandwagon, other auto firms such as Nissan, Toyota Motor Vietnam (TMV) and Chevrolet also decreased prices of locally-assembled cars.

TMV has recently announced its two-month promotion programme for locally-assembled models of Vios and Innova. Accordingly, the corporation will pay the vehicle registration fees of between VNĐ15 million and VNĐ30 million.

Nissan, another brand name from Japan, will give buyers rebates of VNĐ5 million to VNĐ35 million and will also pay registration fees worth from VNĐ13.3 million to VNĐ29.8 million, in addition to providing an accessories package. The total value of the cuts applied on each Nissan Vietnam car is approximately VNĐ50 million.

Prices of imported types of Toyota Fortuner and Yaris and of several types of Hyundai cars imported from Thailand, Malaysia and South Korea have remained stable.

Drop in auto sales

According to a report by the Vietnam Automobile Manufacturers’ Association released on Tuesday, auto sales dropped sharply in recent months. In the first eight months of this year, 177,038 units were sold, 10,825 fewer than last year in the same period.

Sales of locally-assembled autos also dropped sharply as customers await next year’s anticipated tariff cancellation. This, combined with a preference for imported vehicles has resulted in a drop of 11 per cent of locally assembled cars, to 126,984 units in the first eight month of this year, whereas the number of imported vehicles rose 10 per cent to 50,052 units.

Insiders say once locally assembled vehicles are sold out, car prices may rise again; if they drop due to the zero import tax, the price reductions will not be as sharp.

Ngọc Thọ, a resident of Hà Nội, told the news website that despite the discounts, Vietnamese customers pay far more for their cars than the cars’ value. Thọ calculated that, the CX5 2.5, the most expensive version of Mazda CX5 in Việt Nam, is being sold at VNĐ899 million. To own the vehicle, customers will have to pay nearly VNĐ1.02 billion, including registration fees and insurance. Meanwhile, the most expensive CX5 version in other countries sells at VNĐ600 million.

Phạm Anh Tuấn, head of the Vietnam Automobile Manufacturers’ Association (VAMA)’s Policy Sub-Committee, told the website that in fact, taxes in Việt Nam are highest compared to other countries in the region and also in the 21-nation Pacific Rim forum states. Taxes account for 40-50 per cent of the total value of a vehicle. The company only gets about 10 per cent of the profit, the dealer gets about 5 per cent of the total value of the car depending on the marketing and sales capabilities. — VNS

auto sales