The purchasing power has been falling dramatically and nearly frozen in the second quarter of 2020 which is the peak of Covid-19. After the government announced exemption of fees and tax as a stimulus to the market, economists have awaited and predicted a miracle to push up purchasing power.
However, the market is still depressed though registration fee has fallen half, tariff on imported accessories is zero and producers have launched big promotion program worth hundreds of millions of Vietnam dong. For instance, to appeal consumers, many Ford outlets have launched promotion program to cut half or most registration fee for those who buy Everest.
Those who buy Ford Everest Titanium 2.0L AT 4WD will enjoy a reduction of VND200 million (US$ 8,609), the lowest up to now. Other products followed suit like Honda CR-V 2020, MG HS and ZS, Mazda6 2020, Suzuki Ertiga (Sport).
An employee of a representative office of Nissan in Go Vap District moaned the second wave of Covid-19 has put down expectation to raise sale despite huge promotion programs without precedent. Automobile sales have fallen drastically; one salesman can only sell one car one month whereas before they could sell three every month.
A representative from Toyota Sai Gon East revealed the sales declined from 50 percent to 70 percent while service dropped by from 25 percent to 30 percent; therefore, the company suffered loss of around VND25 billion in the first months of the year.
He added that in addition to Covid-19 crisis to economic downturn, residents tended to tighten their spending meanwhile rise in imported cars and locally-assembled ones resulted in fierce competition between companies.
Specifically, Toyota has had monopoly on design of Fortuner and Vios yet several importers are allowed to produce and import the same kind leading to fragmented market share. That’s why many companies such as Toyota decided to sell at a loss to clear off inventories in 2019.
Businesspersons said the market will continue falling due to Covid-19 development and consumers’ anxieties of economic situation not mention to laid-off automobile owners who are under pressure to pay bank loan interest.
Economist Nguyen Duc Minh Hai from the Vietnam University in Ho Chi Minh City analyzed that more cars will be launched from now to end of the year and more attractive promotion programs will be launched to save business situation in 2020. It can be said that competition between automobile companies will be more intense.
Before, according to the Vietnam Automobile Manufacturers' Association’s forecast, the automobile market will see negative growth amidst Covid-19 comeback in 2020 and if the pandemic continues to hit the Southeast Asian country, sales of automobile will drop to the lowest in ten recent years.
