Used car dealerships mushroom to meet demand

In anticipation of high market demand, auto manufacturers and traders have been vying each other to open used car dealerships which offer better customer services than before.

These dealerships are aware that newly licensed drivers tend to buy old cars as they are afraid of having accidents with their new cars, paying a high price for a brand new car or servicing a loan with a high interest rate.

Automakers consider secondhand-car business a chance of selling new cars as there are many car owners wishing to exchange for brand new models but they do not know how much their own cars cost.

Toyota Motor Vietnam (TMV) will expand its used car business with a series of used car outlets to be established at its dealerships nationwide after the opening in mid-2010 of the Used Car Center at Toyota East Saigon Joint Stock Company.

Nguyen Khoa, director of the used car center, expressed optimism about the future growth of the secondhand car market, especially at a time when new vehicle registration fees are increasing.

Its business has grown 20 percent since the center was launched, he said.

Khoa said the demand for used cars in HCMC was surging as more youngsters are learning to drive and old vehicles can be immediately put into use without having to wait for the number plate and registration.

Despite forecasts that auto sales in Vietnam this year will continue to drop, Khoa said the used car segment could edge up by an impressive 15 percent – 20 percent.

TMV’s used cars can still compete well with cheap cars made by South Korean firms, Khoa said.

Though Mercedes-Benz Vietnam is known as a luxury car maker in Vietnam, it has recently joined the used car segment by launching Mercedes-Benz Auto Service and Trade Center on Vo Van Kiet Boulevard in HCMC’s Binh Tan District.

The new facility, which was invested by its dealer Hang Xanh Motors Service Joint Stock Company (Haxaco), is the only service facility in the country where used Mercedes-Benz autos are traded.

Earlier, Audi Vietnam and Euro Auto, distributors of BMW, also launched their second-hand car services. Meanwhile, Anycar Vietnam is developing a network of certified pre-owned car outlets selling all locally assembled auto brands.

Auto traders see much potential in the used car market because many average-income earners need secondhand vehicles. But one setback in this market that has been vexing buyers is the lack of inspection and warranty services.

To solve this problem and increase their competitiveness, many auto manufacturers and traders are now willing to provide car inspection and warranty services.

Used cars supplied by TMV sales agents to the Used Car Center at Toyota East Saigon must be checked and evaluated by Toyota engineers.

Vehicles meeting requirements will be granted quality certificates. Customers are also offered after-sale services with qualified warranty and maintenance.

As a pioneer in the used car market, Ford Vietnam said the quality of its used vehicles must be tested through an assessment of 162 parts which helps specialists assess exactly the state of the car and repair it if necessary to ensure the best operating conditions possible before delivery to consumers.

Similarly, a representative of Anycar said its used cars would be strictly inspected and granted quality certificates before they were put up for sale. The firm said it would not sell disqualified vehicles.

Meanwhile, Haxaco of Mercedes-Benz Vietnam provides warranty of 1 year or 20,000 kilometers for cars that have been in use for up to 5 years or 100,000 kilometers since their first registrations.

Customers will be provided with information about vehicle history, an engine performance certificate and other documents.

However, some traders said vehicle inspections might push up prices of used cars. The best selling used cars are those priced from VND400-600 million per unit.