Vietnam Express reported Audi prefers to participate in more exclusive and luxurious events, Ferry Enders, its CEO for Vietnam, said at the launch of a new showroom in HCMC’s District 7 in March 2024. Lexus expressed it has different business strategies every year, and this year they include not participating in the event. Mercedes has not explained its absence.

Other major brands to not participate are Mini, Kia, Mazda, and Peugeot, all manufactured and distributed in Vietnam by Thaco. VinFast, Nissan and Jeep have also opted out. 

11 companies have confirmed their participation: Ford, GAC, Honda, Isuzu, Mitsubishi, Skoda, Subaru, Suzuki, Toyota, Volkswagen and Volvo. Surprisingly, three motorbike brands, Honda, SYM and Yamaha will also take part.

Last year the Vietnam Motor Show was cancelled due to falling demand for cars in the country. The annual event is usually organised in October to boost sales during the year-end season.

Auto brands have been introducing new models at lower prices than their predecessors to boost demand. South Korea’s Hyundai launched the 2024 MPV Stargazer at prices starting at VND489 million (US$19,210), down 15% from the previous 2022 model.

However, it boasts more advanced technology with wireless charging for smartphones, electronic brakes, forward collision waring, and lane assist. Toyota announced a 4.6% cut in the prices of its 2024 Corolla Cross SUV to VD820 million (US$32,200). It has received many new upgrades in technology and safety systems including a larger entertainment monitor and reverse brake assist.

Germany’s Volkswagen is selling its special edition of the SUV Teramont starting at VND2.5 billion (US$98,200), down 12% from the 2021 version. Mazda, assembled in Vietnam by Thaco, is selling its CX-5 at VND749 million (US$29,400), down 10% from the previous model.

“The key is to claim more market share. Amid a slow market, customers prefer affordable products. Prices determine the number of buyers,”  the manager of a Japanese auto dealership in HCMC said to explain why prices are being lowered.

Other industry insiders said by lowering prices companies are able to reduce their inventories, thus cutting storage costs. Higher sales also mean they are able to pay their bank loans faster. Last year auto sales plummeted by 25% to 369,400 units with most brands suffering double-digit declines. In Q1 2024, the Vietnam Automobile Manufacturers Association posted a decline of 18% to 58,200 units.

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Source: Vietnam Plus

Of the sold vehicles in Vietnam, there were 21,696 passenger cars, up 28%; 7,990 commercial vehicles, up 39%; and 352 special-use vehicles, an increase of 17% compared to February 2023. In terms of vehicle origin, the sales of domestically-assembled cars reached 16,174 units, up 30%, while the number of imported completely built-up (CBU) cars were 13,864 units, up 31% from the previous month.

In the first three months of 2023, VAMA members sold a total of 70,392 units, down 22% compared to the same period last year with the sales of passenger cars, commercial vehicles, and special-use vehicles dropping by 26%, 5%, and 48%, respectively. By the end of March 2023, the sales of domestically-assembled cars decreased by 34% while the number of imported cars dropped by 4% compared to the same period last year.

According to experts, besides car sales of VAMA member units, the Vietnamese auto market also includes other automakers such as Audi, Jaguar Land Rover, Mercedes-Benz, Nissan, Subaru, Volkswagen, and Volvo but those automakers do not disclose business results. Meanwhile, Thanh Cong Group (TC Group) announced its sales of 5,773 Hyundai automobiles in March. Besides, VinFast reported that it handed over 915 electric cars to customers.

After seeing a decline in sales of most car manufacturers in January, car manufacturers and dealers have continuously applied preferential and promotional policies, which focus on supporting registration fees or deducting cash for car buyers to stimulate demand, so that the auto market maintains its growth momentum. Higher sales are expected in the second quarter of this year as the demand will increase thanks to the peak tourism season with greater travel demand, experts said.

Data from Statista revealed Vietnam total vehicle sales volume in 2022 amounted to approximately 358 thousand units, reflecting an increase from the previous year, likely due to the recovery of the Vietnamese economy post COVID-19. Meanwhile, passenger vehicles sales, accounting for the largest share of the total sales volume, reached 284 thousand units in that year.

Having suffered from the COVID-19 pandemic in 2020 and 2021, the total sales volume of passenger cars is expected to recover and grow within the next few years. However, the country’s lack of infrastructure for electric vehicles, plus the ownership costs are great deterrents for consumers. 

While an increase in domestically-assembled cars is a good sign for Vietnam’s automotive market, the focus may unfortunately remain in internal combustion engines (ICE) — a major contribution to greenhouse gas (GHG) emissions.

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“The ASEAN vehicle market largely shrugged off the threat of COVID-19 in the first two months of the year. However, the crisis severely dented vehicle demand in the region from March,” says David Leggett, Automotive Analyst at GlobalData.

“Several markets of the region turned down sharply in the first quarter as lockdowns shuttered dealerships and manufacturing plants across southeast Asia. Thailand saw first quarter sales down 24% as its economy reeled under the impact of much-reduced travel and tourism. Malaysia Q1 vehicle sales were down by 26% and Vietnam saw a slump of almost 32%.”

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The worst of the crisis is expected to be in the second quarter of 2020, before economic lockdowns begin to be eased this month and in June.

Leggett continues, “Although 2020 is seeing a setback for the automotive sector in ASEAN markets, long-term prospects for the region remain very strong. GlobalData’s analysis points to strong indicators for long-term demand as motorisation rates rise with high economic growth—especially in Indonesia with its increasingly transportation hungry population of 273 million. Its market of around 1 million new vehicles a year is forecast to double to 2 million vehicles a year by the end of this decade.

“In addition to strong long-term market prospects, the automotive manufacturing industry in the region benefits from relatively low costs, favourable government policies for investment, as well as free trading regimes for vehicles and components.”

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The post ASEAN Vehicle Sales Down 19% In Q1 2020 appeared first on Asia Pacific Metalworking Equipment News | Manufacturing | Automation | Quality Control.