A representative of a Toyota auto dealership said in Nguoi Lao Dong newspaper that auto sales have risen since end-2016 but the growth rate is not high. He said sales surged in January thanks to higher demand before the Lunar New Year holiday.
He noted that consumption of Toyota Fortuner cars worth VND980 million to VND1.15 billion each imported from Thailand was strong. Many clients have to place orders now but delivery will not happen until April or May.
Nguyen The Hung, director of KYLIN-GX668 Trade Company in Haiphong City, said production has shrank as a result of import tariff cuts.
Toyota used to produce five car models such as Vios, Fortuner and Innova in Vietnam. The automaker now manufactures one or two models and imports others for sale on the local market.
“Domestic car assembly is falling and CBU auto imports are edging up,” Hung said. CBU cars enjoy import tax cuts so they have an edge over domestically assembled automobiles.
Hung said five- and seven-seat cars manufactured in Thailand and Indonesia, which are subject to lower import tariffs, lured customers the most. Imported cars with engine capacity under two liters have also registered sales increases since special consumption tax cuts last July.
Businesses forecast retail prices of autos would drop by 7%, or US$500-1,000 per unit, given import tariff reductions of 40% to 30% in line with the ASEAN Trade in Goods Agreement (ATIGA) in 2016-2018.
Prices will dip by 20-25% in 2018 compared to the current levels when import tax on automobiles manufactured in ASEAN countries plunges to zero.
Enterprises said auto sales would not increase strongly this year as clients wait for sharp price falls next year.
The Vietnam Automobile Manufacturers Association (VAMA) has predicted Vietnam’s auto market would expand 10% in 2017, well below 24% in the previous year.
Auto sales rose to a 20-year high of 304,427 units in 2016 but demand will unlikely increase sharply this year given price drops in 2018.