Vietnam automobile market in early 2018 is in turmoil. While consumers rushed to buy cars for demand before the Lunar New Year, suppliers lacked cars to sell.
When prices become secondary
In the days approaching the Lunar New Year, according to a reporter’s survey, the auto market is bustling. But hidden behind that is the inhibition of not only consumers but also of suppliers by the state of “sold out”.
Many consumers come to the dealership to buy a car and get the same answer: Out of stock.
Notably, the shortage is not only in the field of imported vehicles but also with locally assembled vehicles.
For imported cars, contrary to consumers’ expectation throughout 2017, the market not only did not receive the rushing import but also dripped.
Up to now, only a few “lucky” automakers have imported several batches of cars in very small numbers. For example, Honda imported 750 lots of CR-V or Thaco to quickly bring back 358 BMW and MINI…
Meanwhile, due to lack of components, assembly activities of many domestic manufacturers have also been delayed. Even big car manufacturers like Hyundai Thanh Cong, Truong Hai (Thaco) or Toyota do not have enough cars to deliver to customers.
According to the survey, the shortage situation is the most serious for car models that are popular with consumers. While the demand for shopping cars before the Lunar New Year increased sharply, the car manufacturers were in short supply.
A round of Honda dealers in Hanoi can be clearly seen, not only is the imported CR-V model lacking goods but also the locally assembled City model is not available for consumers to order. Honda dealers said that the City model had to wait until the Lunar New Year and delivery time could not be determined because it was unknown when the new factory will arrive.
Even half a month ago, Thaco also sent a notice to the dealer system to “thoroughly” stop trading for the two best-selling models, Mazda CX-5 and Kia Cerato.
Facing with a shortage of goods, many customers present at auto dealers admit that having cars to buy now is important, but prices have become secondary.
“I made a mistake when I didn’t buy a car last year because I wanted to wait until this year to buy a cheap car. Who would have thought that I offered to pay more to get a car before Tet but they all shook their heads,” said Nam in Thanh. Tri (Hanoi) share.
A customer from Bac Giang goes to Hanoi to buy a CBU imported Honda CR-V. Taking a turn, he was tired: “This car price has been put up hundreds of millions compared to the plan. Yet when I even offered to” lined up “the sales staff, but they still shook their heads. They explained that only a small number of cars were imported, so they were sold out. There are no cars to sell but the new ones are unknown. ”
The situation that consumers “demand” to spend extra money to buy cars is no longer a rare thing. The most popular models are those imported in small quantities by Toyota Land Prado, Ford Explorer or even Honda Civic. Even the most popular pickup truck in the Ford Ranger market falls into a shortage of goods that make consumers eager to spend more money to sign a contract.
For many consumers, this is probably an unexpected scene because only a month ago, in 2017, the psychology of waiting until 2018 to buy cheap cars has covered the market. This psychology has caused the total purchasing power of cars in the market to be pulled down even though the price of ordinary cars in 2017 has dropped very low.
Contrary to the indifference of the 2017 price reduction to wait for an uncertain prospect of 2018, now, with many consumers, the price has become secondary but most importantly has a car to buy or is not.
“Broken game” because of scarcity of supply
The adversity of the car market is considered to stem from policies issued from the end of 2017 and officially take effect from January 1, 2018.
Specifically, in October 2017, the Government issued Decree 116 with new regulations relating to imported CBU cars and Decree 125 which regulates the import tax on automobile components.
The first is Decree 116. According to this decree, in addition to the requirements for standard items such as service workshops and test roads … that car businesses must meet, there are 2 other regulations that are obstructing “access. “Imported cars are required to have type quality certificates and inspection requirements for each imported car lot.
Immediately after the issuance of Decree 116, many businesses voiced difficulties, even paradoxically because countries around the world do not have the documents required by Decree 116. However, some other businesses think that the world’s automobile corporations can meet the required procedures. The problem is that, before a specific circular guide, businesses do not know how to manage.
Another regulation that is causing difficulties for imported cars is the inspection requirement. Specifically, according to the new regulation, each lot of imported cars regardless of the number and whether the same type, the same model of car with the same parameters must be tested. Enterprises calculate that if this regulation is implemented, each lot of imported cars will cost an equivalent of about US $ 10,000 and wait for about 2 months before being able to sell to the market.
Products assembled in the country are somewhat less … more tragic. Immediately after the Government issued Decree 125 which applied a preferential import tax rate of 0% for some types of automobile components within 5 years, some car manufacturers immediately reduced their retail prices based on component taxes. new to stimulate demand.
However, the price reduction action that has been taking place since November 2017 has had almost no significant impact on the market other than communication effectiveness.
The main evidence is the scarcity at this time. The reason recognized by the car companies is that the waiting for import of components at the 0% tax rate has also slowed down the assembly activities. When the production and assembly activities stop to wait for components, of course, the number of vehicles produced will sharply decrease, causing the market to lack of supply.
When the import tax of cars from intra-ASEAN countries decreases to 0%, the market will have a vibrant season. However, two new policies have indirectly caused the market to be “broken” by the shortage of supply.