114-6-2023 (HANOI) Vietnam’s auto sales witnessed a second consecutive monthly decline in May as consumers tightened their purse strings amidst economic uncertainty, according to a report by Vietnam News Agency on Wednesday.
Data from the Vietnam Automobile Manufacturers’ Association (VAMA) revealed that total vehicle sales in May dropped by 8 percent compared to April, reaching 20,726 units. This decline followed a sharp month-on-month decrease observed in April.
The sales figures reported by VAMA member-manufacturers also registered a significant decline of 36 percent in the January-May period, with a total of 113,527 units sold. Local sales of Vietnam-made vehicles experienced a sharp drop of 43 percent, while imported cars saw a decline of 23 percent, according to VAMA.
The report further highlighted the substantial decrease in sales across different vehicle categories. Total new-vehicle sales for tourism vehicles plummeted by 41 percent compared to the same period last year, while commercial vehicles sales experienced a 12 percent decline, and special-purpose vehicles sales dived by 63 percent.
Industry experts attribute this sustained decline in sales over two consecutive months to the overall decrease in demand, resulting from economic difficulties that have compelled both businesses and consumers to adopt a more cautious approach.
To address the dampened demand for vehicles, the Vietnamese government is taking steps to reduce registration fees on locally-made cars by half. The government plans for this reduction to take effect from July and last for six months. However, the Finance Ministry estimates that this move could lead to a decrease of up to 9 trillion Vietnamese dong (around 380 million U.S. dollars) in the government’s budget revenue.
While previous cuts in 2021 and 2022 successfully stimulated car sales, the Finance Ministry expressed concerns that the upcoming reduction may not have the same impact since the current challenge lies more on the demand side rather than the supply side caused by COVID-19 lockdowns.
