Vietnam Sluggish Auto Sales Hit Major Motorshow

Luxury brands Mercedes, Lexus, Audi, and BMW along with Kia, Hyundai and VinFast, reportedly will not participate in this year’s Vietnam Motor Show, the country’s biggest auto event, in October.

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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