Auto market faced bumpy road in H1

In June this year some dealers were still offering discounts for cars that were manufactured last year, an unusual move in the auto market.

Some cars like the Toyota Corolla Cross and Mitsubishi Xpander saw prices drop or surge VND60 million at different points in the first half of the year.

The head of a Toyota dealership in Ho Chi Minh City said in April that she had to accept less profits to bring down the prices of the SUV Corolla Cross 2022 to reduce inventory.

The model, which was imported from Thailand, was one of the most sought-after last year and was often priced higher due to high demand.

A drop in sales has been forecast since the end of last year as signs of global economic recession and high inflation combined with challenges in the property sector and high loan interests have discouraged consumers.

Auto sales plunged 31% year-on-year in the first six months to 176,976 units.

Brands have been offering discounts of up to VND300 million per unit for cars manufactured last year, such as the Ford Explorer, Volkswagen Teramont and Subaru Forester.

High-end brands such as Volvo, Audi and Mercedes also offered promotions.

The government on July 1 lowered registration by half for cars manufactured or assembled locally to boost demand, but industry insiders do not expect the decision to be effective.

Customers look at a car at a dealer in Ho Chi Minh City. Photo by VnExpress/Pham Trung

“With high loan interest rates and economic challenges that affect people’s income, customers are still reluctant to make purchasing decisions,” said Nguyen Quang Khai, director of business at Ford Phu My dealer in Ho Chi Minh City.

Vo Quoc Binh, CEO of Binh Minh dealer in HCMC, said that the market can expect a recovery by the end of this year, but he added that it will be difficult to reach the same levels as last year.