Automobile market in May –Inching up slowly, still in inventory

	New regulations on import tax of automobile components
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The domestic automobile market has been inching up. Photo Nguyen Ha

In particular, the number of domestically manufactured and assembled vehicles in the first five months of 2020 reached 49,949 units, down over 30% over the same period last year (reaching 75,569 vehicles).

Inching up

Thaco did not publish itsresult, so according to the data released from Toyota Vietnam, this joint venture is leading the market (excluding buses and trucks).

Specifically, in May 2020, Toyota Vietnam reached 4,311 units (including Lexus cars), although it decreased by 33% compared to the same period last year but grew by 48% compared to April 2020. In particular, the Toyota Vios model maintainedits top position in the market and Fortuner continued to be on the list of best-selling models.

According to the announcement from TC Motor (representative of Hyundai Thanh Cong brand), the sales result of Hyundai in Vietnam in May 2020 reached 4,833 units, an increase of 119% compared to the previous month (accumulated in the first five months of 2020 to 22,401 vehicles). In the above products, Hyundai Accent and Grand i10 regained their positionwith sales of 1,128 and 1,076 units in the past month, up 82.5% and 135.9%, respectively.

In May, sales of three domestic assembled models of VinFast reached 2,161 units, of which 1,156 Fadil cars, 682 Lux A2.0 cars and 323 Lux SA2.0 cars. This was the result of a series of incentive programs in the past month, in which VinFast reduced the price to VND896 million for Lux A2.0 and VND1.48 billion for Lux SA2.0 with 100% immediate payment. In addition, the company introduced the program "Change old for new" with cars circulating for less than seven years of any brand registered by the owner for at least six months, and not subject to financial obligations to take a VinFast car.

Spectacular change of VinFast Fadil

The list of 10 best-selling cars in the market in May has changed significantly. In addition to the familiar name in the leading position is Toyota Vios (with 1,958 sales of cars in May, an increase of 852 units compared to April), the second position is Honda CR-V (with a salesincrease three times more than the previous month). Holding the third position is the "national" pickup model Ford Ranger.

Surprisingly in the best-selling cars list in May is the rise of the fourth model from VinFast brand, the Fadil. With 1,156 cars sold, the A-size model of the Vietnamese manufacturer has surpassed rivals Grand i10 (6th position– 1,076 units) and Hyundai Accent (5th position– 1,128 units). In addition to Fadil, VinFastis also named in the list of May 2020 with the Lux A2.0 sedan, reaching 682 vehicles, ranked 8th position.

Xpander, from the bottom of the table in April, jumped to No. 7 in May. Names like Toyota Fortuner and Kia Cerato have retreated to make room for Hyundai SantaFe and Mazda3.

Domestic production is still difficult.

There is worries about inventory

Due to the impact of the pandemic and customer psychology waiting for falling prices under the Government's support policies,the number of cars sold in the first five months of 2020 dropped sharply.Accumulated in the first five months of 2020, sales of VAMA members reached 79,396 vehicles of all kinds, a sharp decrease compared to 119,604 vehicles in the same period of 2019.

By the end of 2019, with high growth rates, the forecasts indicated that the Vietnam automobile market in 2020 would grow by over 15%; in which, the segment of individual cars increased by over 20%, so the automobile enterprises had planned to produce parts ordered from the end of 2019. Unexpected progress of the disease, the sharp decrease in vehicle consumption caused the high inventory, domestically assembled carsproduced by VAMA membersaremore than 20,000 vehicles. In addition, inventory of components of enterprises is also high.

That's why the market is going on the competition of discounts and increasing promotions to entice customers. In June, the continuation of many locally made cars 'launched' incentives. For example, Truong Hai Automobile Company (THACO) is increasing promotions for all Mazda products this month. Customers who buy the Mazda CX-8are also offered genuine accessoriesworthVND25 milliondepending on the version with direct discounts from VND95 to VND150 million. Similarly, Mazda CX-5 is directly discounted from VND55 to 85 milliondepending on the version and is also offered a set of accessoriesworth VND30 million.

In June, customers buying locally-assembled Toyota Fortuner cars receive a great deal. Dealersare reducing from VND65 to 80 millionfor their customers.

Particularly, the production version in 2019 has a reduction of up to VND120 million. With Hyundai, dealers are discounting VND50 to 65 million for Santa Fe models depending on the version.

However, many comments show that the sales results in June will not have a sudden increase because customers are still trying to be"patient" waiting for dealers to not withstand the pressure of inventory and car prices are reduced.

Nearly half a year has passed, the car market shows that 2020 will be a year when the number of cars will definitely decrease, even if it is difficult to grow. The number of locally assembled vehicles is unlikely to reach 150,000 units in 2020, while the number of locally assembled cars in 2019 has decreased by 12% compared to 2018.

Although the Government has been applying many domestic support policies and solutions (such as from July 10, some domestic models will enjoy a preferential import tax rate of 0% for raw materials and supplies., components have not been produced yet in the country, or 50% reduction of registration fee). However, it can be said that the Vietnamese automobile industry is facing great difficulties.