The Year-End Auto Market: Luxury Cars Strive to Clear Inventory

Double-Digit Growth, But Consumer Spending Remains Weak

As of now, although luxury car brands have not disclosed sales figures for the year, the competition among them remains intense as they continuously launch promotional campaigns and discounts to stimulate consumer demand during the year-end period.

Volvo is a luxury car brand that has been consistently gaining market share in Vietnam recently. According to a Volvo dealer, speaking to Tien Phong, the dealership’s sales performance has shown improvement, with a growth rate of 25-29% compared to the previous year. However, this increase is mainly due to the low base effect, and the market has not yet returned to the vibrant phase of 2022.

According to the dealer, the luxury car market is highly sensitive to the health of the economy. This year, the real estate and stock markets have experienced fluctuations, and the business environment still has many risky factors, making consumers more cautious in their spending.

“Thanks to the policy of reducing registration fees since September, the car market has become warmer, but mainly in the lower segments. The luxury car market at this time resembles the period from 2020 to 2021, when consumer demand was weak, but in terms of profitability, it will not be as good as before. This year, car brands have to offer numerous promotional programs to sell their vehicles,” the dealer said, also revealing: “The good news is that Volvo has started to clear its inventory, and new cars are being imported to start a new business cycle.”

Similarly, the Audi brand usually only releases sales statistics for the year at the end of December, and some information about financial performance may leak beforehand. However, an Audi dealer revealed that this year’s sales growth for Audi is also in the double digits, but in general, the dealer assessed that “consumer spending is slow, and people are more cautious, especially after the recent storms and floods.”

On the other hand, Lexus, the luxury brand of Toyota, has shown a positive performance since September, with a significant increase in vehicle sales. In September, 157 Lexus cars were sold in the market, a 173% increase compared to the previous month. This momentum continued in October, with 162 vehicles sold, and further growth in November.

Last year, when luxury car brands faced challenges, Lexus still managed to sell 149 cars per month, resulting in a record-high annual sales of 1,793 vehicles, the highest since 2016.

According to a Lexus dealer, with the transaction figures from the past three months, the luxury brand is likely to reach the 2,000-unit mark this year, as there is still a long waiting list for the RX and LX models.

Deep Discounts to Clear Inventory

As consumer spending on cars plummeted from the beginning of 2024, resulting in several sluggish months, some luxury car brands like Mercedes, BMW, and others still have significant inventory. At this point, dealerships are working hard to boost sales and offering substantial discounts.

According to a sales director of a Mercedes Benz dealership, although it is already the end of 2024, Mercedes-Benz still has unsold inventory from 2022 and 2023. The brand is prepared to offer additional discounts because the longer the cars remain in stock, the more they depreciate, and storage costs accumulate.

In the last days of November, the largest luxury car brand in Vietnam by market share continued to offer a 50% reduction in registration fees on the selling price of the Mercedes-Benz C 200 Avantgarde Plus model, produced in 2023 (in addition to the 50% reduction in registration fees due to the government’s policy).

Additionally, the brand announced discounts of up to hundreds of millions of VND for 2022-produced cars in stock, including the Mercedes-Benz C 200 Avantgarde, C 200 Ava Plus, C 300 AMG, E 180, E 200 Exclusive, E 300 AMG, GLE 450 4M, and GLB 200 AMG, with price reductions ranging from 210 to 669 million VND. Earlier this year, the record for the highest discount was set at 719 million VND for the 2022 Mercedes-AMG GT53 4MATIC model.

For Subaru, a Japanese brand, the situation is a “rush” to clear inventory. Currently, for the C-size SUV segment, Subaru is offering discounts of up to 200 million VND on the Subaru Forester through its dealerships in November.

Another brand, Volkswagen, known for its imported vehicles, is also offering substantial discounts of up to hundreds of millions of VND to enhance its competitiveness in the market.

Regarding BMW, after doubling its sales last year, the brand has maintained its positive momentum. However, BMW still has a large inventory, and the company is currently offering a 100% waiver on registration fees for imported models such as the BMW 530i M Sport, BMW 430i M Sport Gran Coupe, BMW X4, BMW X6, and BMW X7.

According to the general director of a luxury car import company, the policy of reducing registration fees in the past three months has provided some support to the overall market, but the increase in sales volume is mainly due to the contribution of VinFast electric vehicles. After the policy expired in late November, the car market may cool down during the year-end period, as most customers took advantage of the promotion during the previous period.

“For luxury cars, the market still has many uncertainties. Businesses are hoping for a recovery and growth in the economy. When the real estate market improves, it will facilitate cash flow, business activities, investment, exports, and encourage consumers to spend more. Given the current situation, we predict that it will take at least two more years for the luxury car market to overcome the difficulties caused by the aftermath of 2023,” the director said.