Vehicle sales expected to drop this year
Vehicle sales expected to drop this year
Vehicle sales in Vientiane will not be as high as in previous years despite strong economic growth, according to motor dealerships.
“The sale of vehicles is not as good as a few years ago,” said a car salesman on Dongnathong Road in Vientiane last weekend. “However, we still think that we will be able to achieve our sales targets for this year.”
Dealerships on T2 Road in Sikhottabong district also admitted their figures won't be as high as a few years ago, adding that the supply of vehicles is low but there is a high demand. This allows dealers to raise their prices.
“Prices this year are very stable because supply and demand are meeting,” said another salesman. He believes the influx of more foreign brand names from China, Japan, the Republic of Korea and Thailand have led to a slower market.
Observers say the settled sales climate has arisen due to the fact that many middle income earners now own cars and are not looking to replace them.
According to a report from the Vientiane Public Works and Transport Department, the number of vehicles in Vientiane has reached 500,000, while official population statistics indicate there are 800,000 people living in the city.
The report also said that one of the main reasons for the rapid increase in vehicle numbers is due to affordable payment plans. A number of dealerships have recently offered financing deals whereby people can take out five year plans and pay the price of the vehicle with interest over time.
Some of the dealers are aware of lower vehicle sales and have introduced a number of new marketing policies to boost sales in an attempt to achieve targets.
Indochina Bank has this month announced plans to cut the loan interest rate for those buying vehicles from 0.85 percent to 0.79 percent.
The bank is also offering promotional deals, hoping to encourage people to purchase vehicles in May and June, which they consider as a low sales season.
Other financial institutions have also cut down interest rates on loans from 0.99 to 0.85 percent. Financial experts have said they expect that interest rates on vehicles will continue to drop as more dealerships open up.
vientiane times
