Car Market During Lunar New Year: Abundant Supply, Decreased Demand

Entering into the beginning of February 2024, the Vietnam automobile market has witnessed contrasting fluctuations compared to the previous period. Firstly, we must mention the policy of reducing 50% of the registration fee for domestically assembled vehicles, which officially expired after December 31, 2023. To seize the opportunity provided by this policy, a large number of users took advantage of buying before the state's incentives came to an end.

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After the policy to reduce 50% of the registration fee for domestically assembled vehicles officially expired after December 31, 2023, immediately, car manufacturers quickly launched promotional programs, including: discounted prices, free registration fees (subtracting cash), free accessories included with the car, or free insurance fees… to stimulate sales in the pre-Tet month – the busiest shopping time and also the time when the highest sales are recorded in the year for all brands in general, regardless of regular or luxury cars. The discounts range from tens to hundreds of millions of dong depending on the model, brand, and year of production.

According to Ms. Vu Thi Bao Yen – a salesperson at Honda, the number of signed purchase contracts decreased significantly in the first week of February 2024. The stock at dealerships is plentiful. Even many models with 2023 vehicle identification numbers (VIN) are discounted by tens of millions of dong, but the discount is not as high as during the valid preferential registration fee policy period. There are still many hot-selling models that have switched to 2024 VIN batches, so the discounts are not as attractive. Therefore, the number of customers visiting showrooms is also significantly reduced.

After the policy to reduce 50% of the registration fee for domestically assembled vehicles officially expired after December 31, 2023, immediately, car manufacturers quickly launched promotional programs

In contrast to the price discounts, the market also witnessed a few unexpectedly price-increase models, ranging from tens to nearly a hundred million dong. However, the number of customers looking for cars has also decreased significantly as they enter 2024.

Mr. Doan Anh Dung, an automotive market analyst, said that this is the “closing time” for buying and selling as the preferential policies from the Government have ended. The low-point of the market has almost passed. For new cars, dealers have started waiting for post-Tet discount programs from manufacturers – the months that always see a dramatic drop in sales.

Meanwhile, for used cars, almost all stores are already in a “sold out” state, meaning they have sold all their remaining inventory and stopped importing new cars. 2023 has seen significant fluctuations in the used car market; therefore, basically, sellers are not willing to “stock up” for the pre-Tet period as they do every year.

The number of customers looking for cars has also decreased significantly as they enter 2024.

For consumers, this is not the ideal time to buy cars anymore. Even if they sign the contract and receive the car immediately, customers will have difficulties completing administrative procedures before Tet. Meanwhile, the demand for car usage will increase significantly around Tet, serving activities such as traveling, visiting, or interprovincial pilgrimages. Driving without sufficient car documents can also pose risks.

Meanwhile, if there is a need, users can completely choose the solution of long-term car rentals for temporary usage during Tet and wait for promotional programs, discounts to boost demand in the new Lunar New Year – which will be much more beneficial in terms of the economy.

SOURCEcafef
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