Vietnam auto sales rising again

Jul 31, 2009, 6:32 GMT

   Hanoi - After falling sharply during the economic slowdown last autumn, car sales in Vietnam are now rising too fast for manufacturers to meet demand, auto companies said Friday.

   The Vietnam Automobile Manufacturers' Association (VAMA) reported sales in June hit 9,699 units, up from just 3,914 in January. Monthly sales peaked at 13,271 in April 2008 before collapsing at the onset of the global financial crisis.

   'We have no cars to deliver to customers until November, due to the shortage,' said Dao Doan Lam of Giai Phong Toyota Joint Venture Company, Toyota Motor Corp's Vietnam agent.

   Lam said the increased demand was due partly to a 50-per-cent cut in the value added tax on cars introduced in May. The government has also loosened the reins on credit to banks, making car purchase loans easier to get.

   Nguyen Tu Anh, a sales agent at Capital Ford in Hanoi, said the VAT cut and a reduction in car registration fees will expire at the end of this year. That is driving clients to buy cars earlier than they otherwise might.

   Anh said the waiting list for new cars at his dealership was several months long.

   The state-run newspaper Tuoi Tre reported Friday that some customers were paying car dealers several thousand dollars to skip to the top of the waiting list.

   VAMA said sales this year rose to 48,000 units through June, and estimated total sales for the year could be between 100,000 and 110,000 units. That is close to the record 110,186 cars sold in Vietnam in 2008, when sales rose 37 per cent over the previous year.

   'From my experience, and based on the number of orders we have received, Vietnam could consume more than cars this year than last year,' said Tran Van Duong, the owner of a car dealership in Hanoi.