Auto sales high in the south, low in the north

Owners of auto showrooms in HCM City are jubilant with the expansion of sales over the last few days. In contrast, the northern auto market is still gloomy.

A famous HCM City auto salon’s owner ate his lunch at 3 pm on May 14. Up to that time, he was too busy receiving clients arriving to buy cars. By 12 noon, he had sold four cars, an astonishingly high figure, comparable to total sales in the two previous months.

Stunned by his good fortune, he checked with other car dealers, who also reported similar windfalls. “All of them are surprised like me. They cannot understand why so many people are buying autos,” he admitted, adding that the best sellers are models priced around $30,000.

The car dealer hopes that sales will continue to rise so that he can clear his stock and pay his bank debts. In order to stimulate demand, his auto showroom already covers 30 percent of the ownership registration tax for clients.

Another HCM City car dealer reported that most of showroom visitors expressed concern about possible car ownership registration tax increases. “We tried to explain to them that there has been no official information about the tax, but they only half-believe us,” he explained.

By 4pm on May 14, his showroom had sold five cars, the highest volume for one day in the last three months since the Government began restricting imports to curb the trade gap.

He surmised that the car rush results from fears that the Government may decide to control car imports even more tightly. Consumers also worry that HCM City authorities may increase car ownership registration taxes to ease traffic jams.

An XPO showroom representative noted that HCM City residents want cars for the upcoming rainy season as well as to beat the summer heat.

“In general, the auto market is always busier in May and June than in the days just after Tet,” he revealed.

While car dealers in HCM City believe market will recover in days to come, Hanoi’s auto dealers are less optimistic. The market remains quiet with very few buyers. Thang Long Vietnam auto showroom owners confirmed that sales are still slow, with visitors stopping by just to ask about taxes instead of buying a vehicle.

He maintains that market perf ormance is difficult to predict, citing the silent market even when rumors of car ownership registration tax increases have circulated. Right now, luxury models at $50-70,000 remain unsalable. Consumers with a real demand for travel tend to choose popular models selling between $10,000 and $20,000.

Auto sellers claim that now is the prime time to obtain a car, because most showrooms are offering price discounts or covering the ownership registration tax. So as Hanoians remain indifferent to car promotions, dealership owners are left scratching their heads.