The automotive market is entering the peak shopping season at the end of the year. However, instead of launching promotions massively to stimulate sales, the market has become difficult, making buyers hesitate to buy the car they want.

Auto market faces scarcity, car loan tightening at year’s end ảnh 1 Customers visit an auto showroom in District 7. (Photo: SGGP)

More fees to own an automobile

These days, the shopping atmosphere in the automotive business areas in Ho Chi Minh City, such as Cong Hoa and Truong Chinh streets in Tan Binh and Tan Phu districts, Nguyen Oanh and Nguyen Kiem streets in Go Vap District, Tran Hung Dao and An Duong Vuong streets in District 5, and National Highway 13 in Thu Duc City, is not as bustling as before the Covid-19 pandemic.

“The number of customers coming to the showroom to see the car in person has decreased by 50 percent compared to two years ago. They mainly make phone calls to get advice on car models and prices. Among the ten people who called, one person may come to see the car. The reason is that many automobile showrooms do not have too many car models on display at the moment. Only when customers make a deposit will they bring them out from the warehouse,” said Nguyen Van Thanh, a car consultant at an auto showroom in Cong Hoa Street in Tan Binh District.

In fact, at present, most dealers and auto shops do not have many car models available. For instance, Nguyen Khanh Hung, living in Thu Duc City, HCMC, had to contact four Hyundai showrooms, and it took him nearly a month to buy a 2022 Santa Fe car for VND1.45 billion.

All the showrooms only showed pictures, the car was not available there. When he was satisfied and made the deposit, he had to pay an additional fee to receive the car immediately, Hung said.

Meanwhile, some other auto companies have launched promotions. Specifically, at the beginning of December 2022, Honda offered free registration fees for the CR-V model and discounted about VND40 million for the Honda City model.

As for KIA’s dealers, the Seltos model is being offered a discount of about VND15 million; the Sonet model is given a discount of about VND15 million and a gift of accessories, depending on the version and agent; the K3 model is lowered about VND25 million, depending on the agent.

Toyota also participates in the promotion race when reducing VND30 million for CVT and CVT Top versions of the MPV Veloz car line to only VND628 million and supporting 50 percent of the registration fee, with the highest value up to VND36 million, for the Vios models. However, despite promotions and price support, for some models, buyers still have to wait for a long time to receive their cars due to limited supply.

In contrast, the high-end and luxury car segments have seen a sharp price increase. For example, the Land Cruiser LC300 model has been raised by VND96 million to a new selling price of roughly VND4.2 billion by Toyota Vietnam. The pearl-white version alone costs nearly VND4.21 billion.

Auto market faces scarcity, car loan tightening at year’s end ảnh 2 Customers visit an auto showroom in District 7. (Photo: SGGP)

Notably, customers who want their cars to be delivered immediately must spend an additional fee of billions of Vietnamese dong. Thaco has also increased the prices of Peugeot 2008, 3008, and 5008 models, with the highest increase up to VND45 million, to VND854-919 million and VND1.06-1.28 billion, depending on the model. The Ford Everest SUV model has also been increased by VND70-100 million per unit due to scarce supply.Car loans tightened It is recorded that many banks are currently tightening car loans, so both buyers and sellers are stuck. “We have to rent a warehouse to keep our customers’ cars because we have signed a purchase and sale contract and made automobile registration certificates, but banks have not disbursed because they have run out of the credit limit. We have to wait though customers have accepted to buy insurance from the bank to get a loan,” said Nguyen Van T., a representative of Mercedes Haxaco Hang Xanh in Binh Thanh District, HCMC. According to T., this is the general situation of many dealers, making it difficult for customers who want to have a car during the upcoming Tet holiday. According to Dr. Nguyen Van Anh, an economic expert at Vietnam National University-HCMC, a shortage of spare parts, high logistics costs, and fluctuations in foreign currency exchange rates have directly affected automobile prices, causing car manufacturers and dealers to increase prices. In addition, credit sources from banks have run out of limits or only focused on lending to priority groups and fields, making customers face difficulty, when buying cars at the end of the year. “Loan approval and disbursement of auto loans will continue to be a challenge. With the current economic situation, plus high inflation, it is impossible to predict the developments of the auto market in the coming time,” said Dr. Nguyen Van Anh.

Import turnover of cars and auto parts touched nearly US$9 billion

According to the General Statistics Office of Vietnam, the number of imported CBU cars in the first 11 months of 2022 is estimated at 160,852 units, with a total turnover of $3.55 billion, up 11.1 percent in volume and 10.2 percent in value over the same period in 2021. According to the latest data from the General Department of Vietnam Customs, imports of auto parts and accessories, accumulated from the beginning of the year to November 15, reached $5.07 billion, up 19.3 percent over the same period last year, equivalent to an increase of $820 million in turnover. Thus, auto accessories and spare parts are currently one of the groups with the largest import turnover, far exceeding the import turnover of CBU cars.

By Tara