Car sales driven by incentives

Car sales driven by incentives

New car sales in Viet Nam soared to their highest level in three years, lifted by a brighter outlook for the economy, attractive financing deals, price discounts and reduced car registration fees.

The country's 18 leading car makers sold a combined 9,785 units in September, up 24 per cent over a month earlier and 28 per cent over same period last year, according to the Viet Nam Automobile Manufacturers Association (VAMA).

Of the figure, 4,070 units were cars and 5,715 units were trucks, up 32 per cent and 19 per cent month-on-month, respectively, said the association, which represents 18 car makers.

"This is the sixth consecutive month the industry volume has been higher than the same period last year," said VAMA chairman Jesus Metelo Arias in a statement released yesterday.

"With the current trend of recovery in the industry we still maintain the forecast of 109,000 units compared with the original forecast of 100,000 units at the beginning of the year," he added.

Besides attractive financing deals, price discounts and reduced car registration fees, which applied from the beginning of this year, a brighter economic outlook was attributed to the surge in car sales.

According to a recent World Bank report, Viet Nam's economic growth rate is projected to reach 5.3 per cent in 2013 and 5.4 per cent in 2014, while its inflation rate will be at 8.2 per cent at the end of 2013.

The bank said Viet Nam's macro economy is relatively stable thanks to the government's proper financial and monetary policies intended to stabilise the economy.

Meanwhile, September's increase of car sales was also attributed to the traditional shopping peak towards the end of the year, which usually begins in mid-September.

In order to trigger the market, which fluctuated following the economic slowdown, most car makers have reduced retail prices from VND5 million(US$240) to VND70 million ($3,330).

While Nissan cut prices for its compact Sunny sedans by between VND5 million ($240) to VND28 million ($1,330), depending on version, Toyota previously cut its Vios compact sedans by VND30 million ($1,430).

Also in the compact segment, Ford reduced its Fiesta 1.6L model by VND28 million ($1,330) to VND525 million ($25,000) for 4 doors version, and by VND26 million ($1,240) to VND580 million ($27,620) for its 5 doors version.

Bigger cars also experienced sharp price cuts, such as Toyota Camry by VND40 million, while Toyota Altis, Honda Civic and Focus saw a cut of VND20 million ($930) each.

The biggest discount came from the Korean made Kia Sorento at VND70 million, while the two other Kia brands, the New Carens and Picanto, saw cuts of VND10 million ($480) and VND5 million, respectively.

Meanwhile, instead of direct price cuts, other cars makers are offering buyers many promotional gifts, such as free car insurance, free car tuning packages and instalment purchases with preferential interest.

Imports up as well

Viet Nam imported 3,000CBU (Complete Built Unit) cars worth US$55 million in September, up 33 per cent in volume and 18 per cent in value in August, according to the General Department of Customs.

This brought the total number of automobile imports in the first nine months to 24,000 units worth $476 million, up 22.5 per cent and 6.1 per cent respectively.

Customs statistics showed that Viet Nam's auto imports decreased to a six-year low last year, reaching only 27,000 cars in 2012, down 50 per cent on 2011.

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