Though the statistics showed the satisfactory sales of cars in 2008 overall, with over 140,000 cars sold, dealers have still been weeping because they were not able to sell cars in the last three months of the year due to the belt-tightening policies of people.
Sales going slowly
The biggest sufferers are the showrooms that sell import cars. Statistics showed that 35,000 imported cars were sold in 2008, but the sales went well only in the first five months of 2008. In the latter-part of the year, car sales began decreasing, making car dealers like cats on hot bricks. A lot of car dealers had to sell cars away, slash sale prices, and shut down the showrooms because of losses.
“At the end of 2007, the sales went so well that we did not have enough cars. Customers said they would pay thousands dollars more to get cars to drive on Tet. But the situation is quite different now. Our overstock remains very big. Though we have slashed sale prices, we still cannot find buyers,” the owner of a showroom on Au Co Road in Hanoi said.
Viet Auto’s showroom, on Khuat Duy Tien Road in Hanoi, was seen full of cars but there were no visitors. The showroom is located on a road which is under the construction, and dust covered the brand new luxury cars.
This is the new showroom of Viet Auto Corp, which was opened just several months ago in an attempt to boost sales. A salesman of the showroom said that the sales in recent months saw a dramatic decrease of 50% in comparison with late-2007 and early-2008. The showroom has barely made a profit with the sold cars. The profit from car sales is not high enough to pay the bank interest, business premises and employee’s salaries.
The showrooms on Lang Ha Road in Hanoi are facing the same situation. Phan Van Dao, Deputy General Director of V Auto Club, at No 46C Lang Ha, said that imported models, especially luxury ones priced at $70,000 and higher, have been selling very slowly with the consumption is just equal to 60% of that of 2007’s year-end. Dao said that smaller showrooms have been facing bigger difficulties.
According to Pham Xuan Dong, Director of the Hanoi branch of Euro Auto, the main distributor of BMW, which has a showroom on Yen Phu road, the sales of BMWs in the last months of 2008 were very slow. The only showroom in the north sold 10 cars a months on average, which represented a decrease of 40% over the same period of the previous month.
Meanwhile, he said, the prices of cars have been decreasing dramatically. BMW series 7, for example, has seen the price down by $30,000/car.
Nguyen Thi Vinh, Director of Vinh Hoang Company, also complained that the sales of imports in the last months of 2008 were just equal to 1/10 of that of 2007. In 2007, she could sell 200 cars a month, while she can sell only 20 cars a month now.
Shutting down shops
In 2007, Hanoi had approximately 20 new showrooms opened, which mainly aimed to sell import cars. To date, nearly 10 showrooms have shut down, while the owners have shifted to other business.
According to the General Statistics Office, in 2008, Vietnamese enterprises imported 50,400 cars of different types. Meanwhile, 15,000 cars have been left unsold.
While some showrooms have shut down, others are still struggling to survive. They have to slash the sale prices to stop losses, but the sharp price decreases cannot bring profits to importers.
An importer said that the loss for a Honda Accord, which was imported in May 2008 at $70,000 may reach VND 50 million, while the loss could be VND 300 million for a BMW series 7 which has been lowered by $30,000 in price.
Source: VNN