What is the reason many Vietnamese people don't buy cars at the beginning of the year?

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After the Lunar New Year holiday, many people often refrain from buying cars and instead opt to invest in other channels, leading to a trend of decreasing domestic automobile production.

According to a report from the General Statistics Office, in February, the total number of new cars, including domestically manufactured and imported vehicles, reached 21,900 units, down by 23.3% compared to January 2023 and a significant decrease of 38.8% compared to the same period in 2023.

The estimated number of domestically assembled cars in February was only about 15,900 units, corresponding to decreases of 26.4% and 25.3% compared to January 2023 and the same period last year, respectively. This marks the lowest production level in many years. In the first two months of the year, the total number of cars produced in Vietnam was 37,500 units, a decrease of 9.8% compared to the same period in 2023.

Additionally, the number of completely built-up (CBU) cars imported in February reached only 6,000 units, with a value of 117 million USD, down by 13.7% in quantity and 19.3% in value compared to the previous month. Particularly, compared to the same period last year, both the quantity and value of imported cars decreased by 51.3% and 54.9%, respectively.

Combining the total figures for the first two months of the year, the estimated number of completely built-up cars imported reached 12,955 units, with a value of 262 million USD, representing respective decreases of 51.6% and 54.3% compared to the same period in 2023.

According to automotive market experts, the decrease in car production in the past month was mainly due to coinciding with the Lunar New Year holiday of the Year of the Tiger 2024, during which many businesses and factories granted their employees time off. However, the significant drop in the number of new cars entering the market, the most substantial in many years, indicates that businesses will face difficulties in stimulating consumer demand.

Furthermore, the expiration of the government's policy supporting a 50% reduction in registration fees since the beginning of 2024 may affect the sales performance of domestic automobile manufacturers. In fact, the Vietnam Automobile Manufacturers Association (VAMA) reported a sharp decrease in car sales in the Vietnamese market in January 2024, reaching up to 50% compared to December 2023.

For this reason, car companies are currently focusing on "clearing out" their stock of products manufactured since 2022, with one German carmaker with a factory in Vietnam slashing car prices by up to nearly 700 million VND.

A Japanese car dealership in Dong Da district shared with Tien Phong newspaper: "During Tet, the sales performance of each employee drops by more than half. At the beginning of the year, customers tend to invest rather than purchase cars. Therefore, manufacturers and dealerships have to offer promotions and discounts to stimulate consumer demand."

In this context, the dealership announced price reductions of many sedan and multipurpose vehicle models ranging from 20-50 million VND. Despite significant promotions, consumer uncertainty at this time has kept the market relatively subdued.

Original article by AutoPro

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