Scarcity of import automobile hikes prices of used motor vehicles and locally assembled cars

Decree No.116 officially became effective as of January 1st 2018 with many regulations in the process of import and customs clearance for automobiles, which has tightened the standards of import cars in terms of their origin, model, level of emission and traffic safety.

Enterprises importing and producing cars are required to have a type-approval certificate for unused cars, documents and assessments to ensure the quality of foreign automobile manufacturers, and registrations of each import car batch.

It is estimated that the supply of imported cars dropped 57 percent compared to last year, of which the pickup truck model was mostly affected with a decline of 59 percent of total vehicle sales compared to the previous quarter.

Based on the information of Toyota Vietnam, there are only few cars left in the range of imported pickup trucks such as Ford Ranger, Ranger Wildtrak. For instance, the imported seven seat Everest model has been out of stock since December 2017.

Contrary to the doldrums of imported cars, the used car market in this quarter became exciting as the car sales increased seven percent compared to the fourth quarter of 2017.

Specifically, in the first quarter of 2018, on the Good Car online market there were more than 26,000 used cars sold, of which over 18,600 cars offered at an average price below $26,310.

Sedan was the top selling model, accounting for 35 percent of news posted with the price of only $22,802.

Next came with SUVs which accounted for 18 percent of total sold volume, increased seven percent from the previous quarter with average prices ranging from $35,606 to $52,620 or Hatchback models which were also a good option with the price of $16,800.

In addition, according to the survey of Good Car online market, the number of cars locally assembled in Vietnam also accounted for nearly 70 percent of the total new cars sold in the Good Car market in the first quarter of 2018.

According to the latest retail price announcement of Nissan car manufacturer, the price of the locally assembled car, Nissan Sunny, is increased by $481 in this May. Particularly, the Nissan Sunny XL model is sold at a price of $19,200, an increase of $440 compared to the price in April 2018.

As explained by Nissan, the increase in prices since April 2018 was due to the transfer of optional accessories to the standard equipment for the car. However, the price of the lowest version still increases without the accessory package.

In contrast to the locally assembled vehicles, Nissan imported car model from the United States, Nissan Teana was sharply discounted to $52,341, as a result of the inability to compete with other strong competitors in the D segment sedan like Toyota Camry or Mazda 6.

Thaco also decided to slightly raise their prices for most of the models such as Mazda 3, Mazda CX-5 and Mazda 6 Premium from $400 to $800, by the end of February 2018.

From the beginning of April 2018, many Hyundai dealers increased their price as well, from $400 to $800 with locally assembled vehicles such as Grand i10, Elantra, Tucson or Santa Fe and stopped applying promotions, offering accessories.

According to the preliminary statistics of the General Department of Vietnam Customs, in the week of April 27th to May 3rd, only 88 cars were imported to Vietnam, none are tax-free from ASEAN market.

Furthermore, according to a preliminary report by the General Statistics Office of Vietnam, Vietnam imported 2,500 units of automobiles in April, decreased by nearly 32 percent and the turnover also reduced by six percent to reach $80 million only.

Since Decree No. 116 and Circular 03 were issued and validated, the playing field of local assemblers was expanded as the amount of imported cars have dropped sharply.

At the present time, only Honda and General Motors Vietnam can import cars from foreign manufacturers.