With lackluster sales – only a few dozen to a few hundred cars per month, affordable car models are no longer seen as strategic or fully exploited by many car manufacturers.
Declining sales
The car model that has been “making waves” in the market is the Mitsubishi Xpander, which achieved a total sales of 20,000 units in 2023. However, the cheapest manual version within the range of variants, priced at VND 550 million per unit, recorded very low sales, with only 1,902 units sold. The remaining nearly 18,000 units delivered to customers are high-end versions equipped with many technologies and features.
Similarly, for the affordable sedan model Mitsubishi Attrage, the company only sold over 5,000 units in the past year, mainly the high-end version. The affordable car model Ertiga from Suzuki only had… 3 units of the standard version sold in 2023, while the hybrid version reached 1,100 units in sales.
One of the current affordable car models
Toyota, a strong brand in the market, has recently launched a series of affordable car models such as Wigo, Avanza or Raize to compete with some popular brands as well as high-end brands with many product segments, but achieved modest sales of 1,748, 3,783, and 4,500 units respectively in 2023.
A few years ago, some affordable car models like Kia Morning, Hyundai i10 were considered the “sales champions” with about 20,000 units per year. However, recently, these models are no longer attractive to customers, and sales have sharply declined. Specifically, Kia Morning sold only 1,467 units last year, while Hyundai i10 performed slightly better with sales of over 7,000 units thanks to having more variants.
Other car models priced from VND 450 million to below VND 600 million per unit, such as Stargazer or Elantra from Hyundai, are also no longer popular, with sales of only a few thousand units per year due to limited technologies and features.
Changing consumer needs and psychology
The main reason for the decline in popularity of affordable car models, although they used to be favored by customers, is the change in consumer needs and psychology, which now focus more on high-end versions or car segments.
Ms. Nguyen Thi Ngan Ha, Sales Director of Phuong Nguyen Auto Trading and Services Co., Ltd., said that 70% – 80% of customers currently tend to choose high-end versions due to their concern for their own safety and their family’s safety. Many car manufacturers also acknowledge that consumers no longer see cars as convenient means of transportation, but demand higher levels of safety and comfort.
Given the changing consumer trend, Ford Vietnam’s leadership has announced that the company will not introduce more affordable car models to the market as before. Previously, the company had discontinued certain affordable models such as Fiesta, EcoSport, Focus and focused on developing and exploiting higher-end models. Among them, a completely new model recently launched by Ford is the Territory with spacious dimensions, high ground clearance, equipped with many safety technologies and full amenities. Although this model is not cheap, priced at around VND 800 – 900 million per unit, its sales have reached 9,000 units in the past year.
Mr. Thai Quang Huy, Sales Director of Saigon Gia Dinh Auto Services Joint Stock Company, explained the declining trend of affordable car models, saying that currently, car manufacturers continuously introduce many new models with rich equipment and affordable prices, giving consumers a wide range of choices. By adding a few tens of millions to about VND 100 million, customers can own their desired car model instead of buying a cheap car that lacks safety features. “Customers are increasingly concerned about the safety of the car as their top priority, and then consider the price. Many people with around VND 300 – 400 million will choose to buy a used high-end car instead of a new cheap car,” Mr. Huy said.
Some car businesses believe that a significant reason causing the decline in popularity of affordable car models is the sharp downturn in the use of service vehicles due to the COVID-19 pandemic and prolonged economic difficulties. Moreover, service users are becoming more selective – prioritizing service providers with new and spacious vehicles for a comfortable experience.
Why not choose a car that is too small?
Mr. Nguyen Minh Dong, a car expert, advises against choosing a car that is too small, as when participating in traffic on expressways with high speeds, the car will feel unstable and unsafe. Customers should choose models with sturdy and reliable structures, equipped with many safety technologies to feel more reassured when using and minimize danger in the event of a collision.
