Auto market drives for more growth
Auto market drives for more growth
The auto market is bullish about 2013 following a promising first quarter’s figure.
The Vietnam Automobile Manufacturers Association (VAMA) reported total sales in the auto market in April were 8,782 units, a 26 per cent increase from one year ago. Although the acceleration is “still fragile” as it still down 32 per cent versus April 2011, VAMA said this was “certainly an encouraging signal of recovery” versus last year.
“These are encouraging numbers when we compare to what happened in the auto industry in 2012. The economic conditions have certainly had a negative impact on the automotive industry over the last 15 months, however we are now seeing some recovery,” said Ashish Kanchan, executive director, also head of automotive sector at market information and research TNS Vietnam.
The auto market was down 33 per cent last year and auto-makers blamed high tax and fees for the slump during the past two years.
Now, the government was offering support by reducing interest rates for banks to provide loans to customers, as well as reducing new car registration taxes between 10 and 15 per cent, new car sales have rebounded, said Laurent Genet, general director at Automotive Asia Limited, the sole dealer of Audi brand in Vietnam.
“As economic issues are being now being tackled by Vietnam authorities, the slowdown should contribute to establish a stronger foundation for recovery. Lately, the stock market index has been exceeding the 500 mark, showing a positive outlook for investors to cash and spend some of their profit. Gold is loosing its attractiveness as an investment is also stimulating consumption of luxury products,” said Genet.
Kanchan believed if the Vietnamese government’s policies retained a status quo, the automotive industry should see a modest growth of 8 per cent – 10 per cent this year with a total of approximately 100,000 units.
In Kanchan’s observation, there were some consumer segments that have been more adversely affected compared to the others. For example, the SME business community has been more adversely affected and we are seeing modest fleet sales and company owned vehicles.
“Commercial vehicles have been the hardest hit segment with sales volumes declining. However, sales to individual buyers are on the increase. All the automotive manufacturers are now focusing on this segment that is relatively stable even in the current economic scenario,” he said.
Of the auto-makers, Toyota beat its rivals in terms of sales gains in the year to date. The Japanese firm sold 9,249 cars, up 30 per cent from one year earlier, according to VAMA. Following are Ford, Thaco Kia, GM Vietnam and Vietnam Suzuki Corp.
In fact, since the fourth quarter last year, auto-makers have been introducing new models and promotion programmes as a measure to recover the slumping auto market.
Mercedes-Benz, for example, unveiled new GLK model. Toyota introduced new models of Camry and Fortuner and Honda launched new Civic model.
Almost all new launches come with a promotion, dealers too are offering their own promotions in some cases, so it is definitely a customer’s market. Automotive Asia Limited, for instance, introduced new Audi A4 and Audi Q5 and Audi R8 Spyder.
“We can see that in a limited volume market, the number of players and models is going up with each manufacturer wanting a share of the pie, this is creating intense competition in the automotive market with more number of models than ever before for consumers,” said Kanchan.
“This has certainly impacted the consumer mindset and kept car ownership on the radar of aspiring consumers. This is the time to get a really good deal if one has stable income and wishing to buy a car,” he added.
Ford Vietnam two weeks ago reported sales of the all-new Focus soared 318 per cent from the previous generation Focus a year ago to 138 units. The class-leading all-new Focus features a number of first-in-segment smart technologies, including Active Park Assist, Active City Stop, Blind Spot Information System and Active Grille Shutter.
“Customers are continuing to respond very positively to our full line-up of Ford vehicles,” said Truong Kim Phong, sales and marketing director at Ford Vietnam. “They are appreciating our focus on the fuel efficiency, smart technology, quality and safety of our vehicles, as well as our ongoing commitment to provide the very best Ford customer experience.”
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