Hai Duong auto market is gloomy

Purchasing power decreased

Mr. Pham Minh Tuan, Deputy Sales Director of Hai Duong Auto Joint Stock Company, said that from the beginning of the year to mid-March, the number of customers coming to the showroom to see cars has decreased significantly. The company sold 140 cars of Mazda and Kia, down 15-20% compared to the same period last year. The sharp decline in purchasing power and the gloomy auto market stem from many reasons. Partly because many people have decided to buy cars at the end of 2023 to enjoy the policy of 50% reduction in registration fees for domestically produced and assembled cars according to Decree No. 41/2023/ND-CP of the Government. This is one of the important policies to stimulate consumption of domestically produced and assembled cars. Depending on the listed price of each car, consumers can save tens of millions of dong thanks to this preferential policy. Therefore, after this policy expires, many people will tend to monitor market developments and the car company’s own incentive programs before deciding to “pay”. Therefore, car sales in the first months of the year were not as expected.

Similarly, Mr. Pham Dinh Bac, representative of Toyota Hai Duong, said that from January to now, Toyota Hai Duong has sold about 200 cars, down about 10% compared to the same period in 2023. Meanwhile, at Hyundai Hai Duong, from the beginning of 2024 to mid-March, about 120 cars were sold on the market, down nearly 50%. According to the representative of Hyundai Hai Duong, February has a long Tet holiday, so it directly affects the sales of many dealers. At this stage, customers only buy cars when they really need to travel, mainly first-time car buyers, few customers "upgrade" their cars. Investment channels such as real estate and stocks are still facing difficulties, so people also consider when spending a large amount of money to buy a car. Customer demand is mainly concentrated in car lines with a price segment of 500-700 million VND. Hyundai Hai Duong also focuses on launching promotional programs for cars in this segment such as Hyundai Accent, Hyundai Creta...

Not only at Hyundai Hai Duong, a survey at a number of car dealerships shows that customer demand in Hai Duong is currently focused on car models priced from 800 million VND or less. Car models in this segment such as Kia Sonet, Kia Seltos, Hyundai Creta, Hyundai Venue, Toyota Raize, Toyota Vios... are favored by many customers because these cars are equipped with many technologies and features, meeting diverse usage needs along with prices suitable for the financial capacity of the majority of car buyers.

Mr. Vu Hoang Truong in Vinh Hung commune (Binh Giang) is in need of buying a car. He spent time surveying and viewing cars at several showrooms before making a decision. "I plan to buy a car for about 500-600 million VND, suitable for my family's finances, but I am also waiting for the companies to have more attractive incentives."

Looking forward to growth

It is forecasted that in 2024, the automobile market in Hai Duong will still face many difficulties and challenges in the first half of the year due to weak consumer demand and buyers' waiting mentality for new car models.

This is also a common situation in the whole country, not just Hai Duong. According to a report by the Vietnam Automobile Manufacturers Association (VAMA) and TC Motor Group just announced on March 12, the Vietnamese automobile market in February saw a sharp drop in sales, down 40.1% compared to January and down 50% compared to the same period in 2023. This is a record decrease in the past 3 years, lower than the year 2021 when the Covid-19 outbreak broke out. However, this is also the low season of the annual automobile market, so a decrease in sales is not unusual. It is forecasted that in the following months, car purchasing power may increase but it will be difficult to meet the high expectations to help the market recover quickly.

Whether the Government continues to reduce registration fees to stimulate demand for domestically assembled and produced cars will also directly affect car purchasing power in the market. In fact, from 2020 to 2023, the Government has issued policies to reduce registration fees for domestically produced and assembled cars in batches. This is considered a "medicine" to support the car market, especially domestically assembled and produced cars, helping the car market recover and create momentum for growth. Although the policy directly supports consumers, it also indirectly supports businesses by increasing sales and output of cars sold. Therefore, many companies and dealers are hoping that this year the Government will continue to issue this policy to facilitate people and businesses.

In order to increase sales, in addition to incentive and promotional programs, many car dealers have organized free test drive and experience programs to reach more customers.