Total car sales dropped sharply last month, beating industryexpectations about imminent market recovery following satisfactoryresults in March.
April sales reached nearly 7,000units, declining 24 percent over March and 46 percent over the sameperiod last year, reported the Vietnam Automobile Manufacturers'Association (VAMA).
Of the number, 2,394 passenger carsand 4,588 trucks were sold, down 26 and 22 percent, respectively,compared to March's levels.
CKD (completely knockeddown) sales reached 5,504 units, down 24 percent month-on-month, whileCBU (completely built unit) volumes tumbled 23 percent.
Eighteen VAMA members alone last month sold over 6,000 vehicles,declining 20 percent over the previous month and 37 percent over theyear.
Almost all carmakers, including Truong Hai,Toyota , Mercedes-Benz, Honda, GM, Ford, Mitshubishi, Isuzu and VMC,witnessed the downtrend. Many were seeing their sales slashed by halfand even by more than two-thirds from the figures of the same periodlast year.
At a VAMA meeting earlier this year, itsmembers predicted total car sales to range between 130,000 and 140,000vehicles in 2012. Now they expected this year's total sales to reachonly about 100,000 units, a decrease of 27.5 percent over last year, theassociation said.
VAMA Secretary Pham Duy Hung said the automotive industry was in an alerting situation.
"Extremely high inventories are forcing most manufacturers andassemblers to take strong measures to reduce their production," he said."Dealer networks are facing cash issues and high inventories inparticular."
Hung noted that, compared to the sameperiod last year, the industry had seen a slump of about 21,300 vehiclesin the first four months of this year.
He attributedthe decline to "extremely high" bank lending interest rates of 18-20percent, tightened lending conditions and "too high" registration fees,which were currently 15-20 percent in Hanoi and HCM City .
"The ‘to be implemented' annual fee set to limit personal vehicle usageis unaffordable to most customers," he said. "This new fee has frozendemand and the market will decline until the fee is cancelled by theGovernment."
Ford Vietnam General Director LaurentCharpentier told local press that, although the Ministry of Transporthas decided not to immediately levy any fees to restrict circulation ofpersonal vehicles, especially personal cars, consumers are stillconcerned about possible fees they might have to pay if owning a car.
This was one of the major reasons that made the car market sluggish from the beginning of the year, he said.
Economists said the consumer price index edging up only slightly by0.05 percent last month proved that consumers were tighteningexpenditure. Families were prioritising essential goods and cars werenow among products that many had excluded from their spending lists.
Petrol price hikes and high taxes were making demand for cars reduce even more sharply, they said.
According to a recent survey conducted by online newspaper Dan tri(People's Knowledge) on how some new fees proposed by the Governmentrecently affected buying decisions, 52 percent of those polled said theywill not buy a car and 23 percent said they will consider it carefully.
Vietnam Economic Forum's online publication Vef.vnreported that many firms including GM and Ford Vietnam now had theirinventories mounting to thousands of vehicles as a result of unsalablecars, and this, together with capital shortages and high interest rates,was causing them utmost difficulties.
Car dealers werecontinuously offering discounts to cope with the situation, it wrote,with Mercedes-Benz recently having to cut prices for its SUV models by331 million-959 million VND (15,900-46,100 USD) per unit.
Excluding Toyota , almost all other firms were said to havetemporarily extended work schedules, dismissed certain numbers ofworkers or given employees more days off. Many of the VAMA members'60,000 labourers were said to be involved in these moves.
Hung said that, with an average passenger car price of 500 million VND(24,000 USD) per unit, the State budget was estimated to have lost a taxrevenue of 6 trillion VND (290 million USD) within the first fourmonths of the year.-VNA
April sales reached nearly 7,000units, declining 24 percent over March and 46 percent over the sameperiod last year, reported the Vietnam Automobile Manufacturers'Association (VAMA).
Of the number, 2,394 passenger carsand 4,588 trucks were sold, down 26 and 22 percent, respectively,compared to March's levels.
CKD (completely knockeddown) sales reached 5,504 units, down 24 percent month-on-month, whileCBU (completely built unit) volumes tumbled 23 percent.
Eighteen VAMA members alone last month sold over 6,000 vehicles,declining 20 percent over the previous month and 37 percent over theyear.
Almost all carmakers, including Truong Hai,Toyota , Mercedes-Benz, Honda, GM, Ford, Mitshubishi, Isuzu and VMC,witnessed the downtrend. Many were seeing their sales slashed by halfand even by more than two-thirds from the figures of the same periodlast year.
At a VAMA meeting earlier this year, itsmembers predicted total car sales to range between 130,000 and 140,000vehicles in 2012. Now they expected this year's total sales to reachonly about 100,000 units, a decrease of 27.5 percent over last year, theassociation said.
VAMA Secretary Pham Duy Hung said the automotive industry was in an alerting situation.
"Extremely high inventories are forcing most manufacturers andassemblers to take strong measures to reduce their production," he said."Dealer networks are facing cash issues and high inventories inparticular."
Hung noted that, compared to the sameperiod last year, the industry had seen a slump of about 21,300 vehiclesin the first four months of this year.
He attributedthe decline to "extremely high" bank lending interest rates of 18-20percent, tightened lending conditions and "too high" registration fees,which were currently 15-20 percent in Hanoi and HCM City .
"The ‘to be implemented' annual fee set to limit personal vehicle usageis unaffordable to most customers," he said. "This new fee has frozendemand and the market will decline until the fee is cancelled by theGovernment."
Ford Vietnam General Director LaurentCharpentier told local press that, although the Ministry of Transporthas decided not to immediately levy any fees to restrict circulation ofpersonal vehicles, especially personal cars, consumers are stillconcerned about possible fees they might have to pay if owning a car.
This was one of the major reasons that made the car market sluggish from the beginning of the year, he said.
Economists said the consumer price index edging up only slightly by0.05 percent last month proved that consumers were tighteningexpenditure. Families were prioritising essential goods and cars werenow among products that many had excluded from their spending lists.
Petrol price hikes and high taxes were making demand for cars reduce even more sharply, they said.
According to a recent survey conducted by online newspaper Dan tri(People's Knowledge) on how some new fees proposed by the Governmentrecently affected buying decisions, 52 percent of those polled said theywill not buy a car and 23 percent said they will consider it carefully.
Vietnam Economic Forum's online publication Vef.vnreported that many firms including GM and Ford Vietnam now had theirinventories mounting to thousands of vehicles as a result of unsalablecars, and this, together with capital shortages and high interest rates,was causing them utmost difficulties.
Car dealers werecontinuously offering discounts to cope with the situation, it wrote,with Mercedes-Benz recently having to cut prices for its SUV models by331 million-959 million VND (15,900-46,100 USD) per unit.
Excluding Toyota , almost all other firms were said to havetemporarily extended work schedules, dismissed certain numbers ofworkers or given employees more days off. Many of the VAMA members'60,000 labourers were said to be involved in these moves.
Hung said that, with an average passenger car price of 500 million VND(24,000 USD) per unit, the State budget was estimated to have lost a taxrevenue of 6 trillion VND (290 million USD) within the first fourmonths of the year.-VNA
