Rough road for car dealers as competition driven up
Rough road for car dealers as competition driven up
Car dealers in Laos have launched a number of promotions to boost the sales of their vehicles amid rising competition in the country.
Kolao's Kia and Hyundai plus Chevrolet dealers in Laos are offering zero interest rate loans for customers who want to pay in several installments within a period of three years. This move is part of an effort to boost sales of their vehicles amid rising business competition in the car industry, which caters to only 6.5 million people.
The number of vehicles in Laos has risen rapidly over the past five years due to strong economic growth and car dealers offering customers the choice of paying in installments, making it possible for lower income ear ners to easily purchase vehicles.
According to a report from Vientiane Public Works and Transport Department, there are currently more than a million vehicles in Vientiane with the city's population only being 800,000.
There are several car brands in Laos, including Toyota, Isuzu, Ford, Nissan, Kia, Hyundai, BYD, Great Wall and Chevrolet.
A number of financial institutions such as Lao-Viet Bank, BCEL Leasing, Indochina Bank and several Thai banks are offering loans for car buyers, which, throu gh competition, have seen interest rates on loans decrease.
Toyota dealers have also lowered the prices of their vehicles. The price of a low model Vigo Champ has dropped from US$30,000 to US$28,500 over the past year. The prices of other higher Vigo Champ models have also dropped due to the large inflow of other car brands.
The stable supply of vehicles in Laos has also caused the price decrease. In 2012, the price of vehicles skyrocketed due to slow supply caused by a number of car factories in Thailand being flooded after heavy rainfalls.
A car dealer on T2 road in Vientiane said he faced stronger competition after the number of car dealerships and vehicles increased. He said there were many car brands entering the Lao market, creating more options for consumers.
He also said due to increasing competition, he began introducing several promotions such as if a new car buyer purchased a vehicle he would throw in several car accessories free of charge.
He also said one of the main causes of the price drop was the demand for cars decreasing.
He said many people already own cars, so he did not see a big increase in the near future with the country also experiencing slower economic growth.
The government has lowered the country's expected GDP growth from 8 percent to 7.8 percent after it suspended a number of infrastructure investment projects as part of an effort to prevent economic and financial crisis.
A number of car dealers hope to revive their businesses in the next few years as the Lao economy expects to recover after 2015.
vientiane times
