The automobile market at the end of this year is not looking very bright as people’s purchasing power has shrunk.

After sales grew 13 per cent in September, the car market in Viet Nam was stagnant in October even when producers offered discounts and promotions to stimulate demand.

While car dealers have to lower the prices of previous-generation car models to boost sales amid weak demand, they have applied the tie-in sale policy for newly marketed models.

After sales grew 13% in September, the car market in Vietnam was stagnant in October even when producers offered discounts and promotions to stimulate demand.

The recent decline in Vietnam’s automobile consumption and its drop to the fifth place in Southeast Asia can be attributed to both external and internal factors, car experts said.

Vietnam, as an open economy with multiple Free Trade Agreements (FTAs) in place, is committed to fulfilling its obligations in the automobile import sector.

The entry of Chinese automakers into the Vietnamese auto market presents both opportunities and challenges for consumers and competitors in Việt Nam, according to local car experts.

Vietnam has vowed to develop green transport and reduce net greenhouse gas emissions to zero by 2050. In addition to shifting from internal combustion engine to electric vehicles, hydrogen cars are also an option for consideration.

Vietnam’s completely-built-up (CBU) car imports from January to August dropped by 9.8% compared to the same period last year, reports the General Department of Vietnam Customs.

Businesses in Vietnam imported 70,915 completely built-up (CBU) vehicles worth US$1.65 billion between January and June, up 11.4% in volume and 5.2% in value, according to the General Department of Vietnam Customs.

Many car manufacturers have applied a 50 per cent cut in registration fees for buyers, depending on car models.

Members of the Vietnam Automobile Manufacturers Association (VAMA) sold 23,800 vehicles in June, up 15% from the previous month, VAMA announced on July 12.

Vietnamese like the convenience and practicality of micro electric cars which allow them to travel within the city, but the high prices and the lack of smart technologies may keep them from buying, analysts say.

Cars will enjoy a 50 per cent cut in registration fees from July 1 after Deputy Prime Minister Le Minh Khai on June 28 signed a decree on registration fee reduction for domestically manufactured and assembled automobiles.

The automobile market continues to be gloomy with weak demand. Sales of imported cars are even worse as only domestically assembled cars can enjoy the 50 percent vehicle registration tax cut per a government decision.

Thailand has surpassed the likes of Indonesia and China to become Vietnam’s largest automobile supplier during the opening five months of the year, according to the General Department of Vietnam Customs.

The Government has approved a proposal to reduce the registration fee for domestically manufactured automobiles by 50%. However, the Ministry of Finance has predicted that the fee cut may not have the desired impact.

Domestically produced and assembled cars are to have their registration fees slashed by half during the last six months of 2023, according to the Government Office.

Many car dealers have complained that the market is sluggish and the inventory level is alarming. The long-lasting losses have forced them to cut their workforce or even consider shutting down.