Vietnam’s automobile supply, both domestically manufactured and imported, is estimated to be 400,000 vehicles, while average domestic consumption is less than 300,000, reported the Ministry of Industry and Trade.
As a result, car manufacturers are slashing prices to attract buyers. Toyota has cut down VND20-40 million (about US$863-$1,725) for its Fortuners and Innovas. Meanwhile, Audi, Subaru and Chevrolet also cut prices from VND80 million to nearly VND300 million (US$3,452-$13,000).
Although this is considered the highest price cut within the market in 2019, it is only limited to high-end segments, and average car buyers still cannot afford such models even at the current discount rate.
Reportedly, the number of imported cars in 2019 would reach nearly 150,000 as the year ends, while locally assembled cars would be 330,000.
The Decree No. 116 which is expected to be effective in early 2020 would create incentives for automobile imports and encourage car manufacturers to expand factories and increase capacity.
It is expected that demands for cars will be up 20 percent in 2020. However, car prices might remain high as manufacturers are likely to wait for incentive policies to be issued, such as exemption on domestic component tariffs and corporate income tax.
According to automakers, plummeting prices are a sign of overstock and there would be more big discounts towards the end of the year as new models are introduced.