Sun. Apr 14th, 2024

VietNamNet Bridge – While other industrial businesses complain about the big
inventories, car dealers seem to be unhurt by economic difficulties, seeing the
car sales increase steadily.

 

Vietnam, car market, high demand, tax policy, investment

The sales of the cars bearing three luxurious European brands were reportedly
very good in January, 2013, though they are priced at between VND1.3 billion and
VND5 billion.

Prior to that, in 2012, despite the economic downturn, the luxurious car sales
still witnessed considerably high growth. A German brand reported the growth
rate of 30 percent in the year. Another German brand reported the growth rate of
23 percent in 2012.

Meanwhile, a source said that the sales could have been even higher, if car
dealers had had enough cars for sale. The problem was that they thought the
sales would be low in 2012 and cut down the imports. As a result, the supply was
short to satisfy the demand, while in some cases customers had to wait one month
to get deliveries.

Despite the higher import tariffs, higher car sales and higher vehicle
registration ownership tax, which have forced car owners to pay nearly 100
million dong more, the luxurious cars priced at VND5-7 billion still have been
selling like hot cakes.

Especially, the car sales did not decrease in the north, especially in Hanoi,
even though the vehicle ownership registration tax increased by 20 percent in
the year.

Explaining the steady growth of luxurious car sales, analysts said that the
economic recession has in no way hurt the rich, the targeted clients of
luxurious car dealers. The demand for luxurious cars always remains very high,
while the number of luxurious cars, though having been increasing rapidly, just
accounts for a small percentage.

About 2,200 luxurious cars were sold in Vietnam in 2012, mostly the products of
the brands from Europe and the US. Luxurious cars keep inflowing to Vietnam
despite the Circular No. 20 which tightens the control over car imports. Instead
of arriving in Vietnam through the official channel, luxurious cars have been
imported as the assets of Viet Kieu repatriates or other channels.

Luxurious brands still can see great opportunities in the Vietnamese market, the
poor country with the average income per capital at $1,200 per annum.

Not only targeting the rich individual clients, luxurious car dealers also
target five-star hotels and resorts which have been arisen in Vietnam. These are
the potential big clients, who need luxurious cars to carry the high income
travelers who come to Vietnam to relax. A report showed that the sales of
luxurious cars to the group of clients accounts for 10 percent of the total car
sales, but the figure would increase rapidly.

The profitable businesses with high growth rates could also be the potential
clients. They tend to use branded luxurious cars, believing that this is a good
way to do business.

Car dealers and authorized distributors in Vietnam have affirmed that they can
provide enough luxurious cars to satisfy the demand in Vietnam. They said they
would set up more sales agents in Hanoi, HCM City and Hai Phong and Da nang,
anticipating the rising demand for luxurious cars.

Observers said the Vietnamese market in the time to come would see the
appearance of more branded products from the US which comes to Vietnam through
official channels. Analysts have forecast that the luxurious car sales may reach
10,000 cars after 2015.

Tran Thuy

By vivian