Luxury car dealers report steady sales despite economic slump
Luxury car dealers report steady sales despite economic slump
Luxury car sales in Viet Nam seem to be unaffected by the struggling economy, with most brands reporting better business in the country.
An Audi distributor in Viet Nam said with the increasing demand for luxury cars, the company expects to double its target of its best-selling model for this year.
"We plan to order 20 units of Audi A8L by the end of this year, but with this momentum, we will double the import volume," said Tran Tan Trung, director of Lien A Quoc Te Company, an official Audi distributor in Viet Nam.
With a retail price of VND4.8 billion (US$228,000), the car is a rival to Mercedes-Benz S500, BMW 750Li and Lexus LS 460.
But Audi A8L is not the only best-selling model from the Audi family. The brand boasts 40 per cent sales surge since the beginning of this year.
Last year Audi sold 600 units in Viet Nam, up 80 per cent year on year.
Toyota's luxury brand Lexus, which recently came to Viet Nam, hopes to sell 400 units in the first year of setting up its official distributorship in the country.
According to market insiders, most of Lexus' models in Viet Nam are experiencing stock-out status as buyers have to wait for a few months to receive their orders.
Even Mercedes Benz Viet Nam, which has a factory in HCM City for over a decade, is facing a stock out. The company, in the first quarter sold 521 units, of which 60 are premium S class models.
In addition, it already sold 10 units of luxury four-wheel-drive G-class model at a price of VND7 billion ($330,000) each, after just months of entering Viet Nam.
In 2013, Mercedes-Benz saw a 70 per cent growth year on year.
One of the keys to the recent growth in sales has been the reduced car registration fees in Ha Noi and HCM City. This reduction has caused a significant decrease in the cost of luxury cars.
According to Duong Dinh Giam, director of Viet Nam's Industrial Policy and Strategy Institute, Viet Nam is expected to go through a period of "automobilisation" once annual per capita income rises above US$3,000.
"Viet Nam will soon reach a tipping point – incomes are seeing strong growth year over year." he added.
According to the IMF, during 2013, per capita income was $1,901.
Meanwhile, famed Italian supercar maker Lamborghini said it will open its first showroom in Ha Noi later this month and it will initially sell one model to start with – the Lamborghini Aventador LP 700-4.
Other luxury car brands, such as Bentley and Rolls-Royce, have also entered the market in the past year.
Previous brands that were available for sale include Mercedes, Lexus, Audi and Porsche.
According to the Custom Office, in the past few years between 3,000 and 5,000 luxury automobiles have been sold in Viet Nam annually.
In 2013, there was a marked increase in the import of cars. As many as 34,500 cars, valued at $709 million, were imported, marking an increase of 25.9 per cent in volume and 15.2 per cent in value, year-on-year.
Meanwhile, car imports in the first five months jumped to a record 20,000 units worth $383 million, up 52.1 per cent in volume and 45.8 per cent in value year-on-year.
Most of the car imports were luxury sedans and sport utility vehicles, according to the Custom Office.
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