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The Vietnamese market stabilizes in April.

by FX BrokerNews

According to data released by the Vietnam Automotive Manufacturers Association (VAMA), new vehicle sales in Vietnam increased by 2% to 21,039 units in April 2024 compared to 20,667 units in the same period last year.

The reported figures exclude sales from Mercedes-Benz, Hyundai, Tesla, Nissan, and a growing number of Chinese brands that have entered the market in recent years, as well as domestic manufacturer VinFast.

Following a weak first quarter, during which buyers rushed to make purchases ahead of the government’s expiration of a 50% sales tax discount at the end of 2023, the market appears to be stabilizing. This trend comes after two years of sharp declines, attributed to the central bank’s aggressive interest rate hikes in the fourth quarter of 2022.

VAMA members observed a slight uptick in demand last month, driven by aggressive dealer promotional campaigns. However, household spending remained subdued, contributing to a slowdown in first-quarter GDP growth from 6.7% to 5.7% year-on-year.

In the first four months of the year, overall vehicle sales declined by 12% to 71,886 units from 81,467 units compared to the previous year. Passenger vehicle sales dropped by 16% to 51,326 units, while commercial vehicle sales increased by 2% to 20,560 units.

Truong Hai (Thaco) group reported a 16% decrease in sales to 23,057 units year-to-date. This included declines in Kia, Mazda, and Thaco commercial vehicle sales. Toyota experienced a significant 34% decline in sales, while Ford’s sales fell by just 7%, supported by popular models like the Ranger, Everest, and Transit. Honda saw a 25% surge in sales, while Mitsubishi experienced a 3% decrease and Suzuki’s sales increased by 5%.

Hyundai separately reported selling 14,420 units, making it the country’s leading auto brand so far this year.

In an effort to attract more investment in battery electric vehicles (BEVs), the government has maintained the registration tax for BEVs at 0% until 2026 and reduced the special consumption tax to between 1% and 3%. These measures are part of a broader package of incentives, including reductions in import duties on components and charging equipment, aimed at promoting BEV investment in the country.

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