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November motor car imports at $200mn

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Some 7,000 cars imported during the month, higher than poor September and October results.

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Total CBU imports in the first eleven months of the year reached 84,000, worth $1.9 billion, down 14.7 per cent in volume and 11.4 per cent in value year-on-year.

CBU imports in November, meanwhile, recovered in both volume and value compared to October. In September and October, CBU imports were worth $155 million and $165 million, respectively, on volumes of around 6,000 units in total; the lowest rates for two years.

The recovery in CBU imports in November is mainly thanks to demand for car purchases at the end of the year. At the same time, this is also a time when many car manufacturers are in the process of finalizing signed contracts with foreign partners.

The imported CBU market has not really grown strongly this year. Insiders said domestic auto consumption is currently unstable because many consumers are waiting for motor car prices to be lowered in early 2018, when import tariffs in the ASEAN bloc will become 0 per cent.

Local automakers and distributors have been trying to accelerate consumption through discounts and promotional programs.

The government recently issued Decree No. 125 to add auto spare parts that cannot be produced by domestic producers to the list of goods entitled to the zero tax rate.

Immediately after the issuance of Decree No. 125, some domestic manufacturers and assemblers such as Truong Hai and Thanh Cong Hyundai immediately applied discount prices ranging from 3 to 5 per cent.

Industry experts predict that motor cars imported from Thailand and Indonesia will continue to increase in the near term because of commitments Vietnam has made under the ASEAN Trade in Goods Agreement (ATIGA), with taxes on CBU imports to fall to 0 per cent in 2018 compared to 30 per cent currently.

New-vehicle buyers shopping around

New-vehicle buyers are increasingly comparing brands, models, dealers, and offers and negotiating harder at authorized dealers before deciding on their purchase, according to the J.D. Power 2017 Vietnam Sales Satisfaction Index (SSI) Study, released recently.

Sixty-five per cent of new-vehicle buyers say they seriously considered another model while shopping for their new vehicle, with shoppers also visiting more brands’ dealerships compared with 2016. On average, new-vehicle shoppers use seven different sources of information to gather preliminary data and feedback about the models they are considering.

The internet is the primary media used, with 99 per cent of new-vehicle owners saying they used online sources while shopping. Browsing specialized websites and social networks has increased notably from last year at the expense of original equipment manufacturer (OEM) or dealer websites, which have been used less frequently in 2017. 

“As competition in Vietnam’s automotive market grows in advance of the scheduled tax cuts in 2018, authorized dealers are actively trying to entice shoppers and boost sales through aggressive discounts and incentives, thereby increasing competition between brands,” said Mr. Loïc Péan, Senior Manager at J.D. Power. “Unfortunately, this sometimes has the adverse effect of increasing expectations with respect to the final vehicle price, and dealer staff neglecting or expediting certain aspects of the new-vehicle sales and delivery process, which both have a negative effect on customer satisfaction.”

The study found that the number of sales standards experienced by new-vehicle buyers has dropped considerably, to 19.6 standards in 2017 from 20.6 in 2016 (out of 22 critical standards evaluated in the study). Specifically, interactions with customers are less pertinent than last year, as more customers indicate that their salesperson was not entirely focused on them (-13 percentage points), that they did not receive a comprehensive explanation of the features and benefits of the vehicle while shopping (-10 percentage points), and/or that they were not kept informed about the delivery status of their vehicle (-8 percentage points). 

New-vehicle buyers are increasingly driving a harder bargain, as 60 per cent said they negotiated a deal, up from 35 per cent in 2016. Additionally, 66 per cent received discounts and 98 per cent received additional freebies from their dealer. Despite receiving more discounts and freebies, however, 27 per cent of new-vehicle owners said they paid more than expected for their vehicle, a sharp increase from 12 per cent in 2016. 

Toyota ranked highest in overall sales satisfaction for the third consecutive year, with a score of 777. It performed particularly well in sales initiation, dealer facility, and delivery process factors. Nissan (776) ranked second, followed by Kia (764).

The 2017 Vietnam Sales Satisfaction Index (SSI) Study examined sales satisfaction in the mass market segment using six factors that contribute to overall customer satisfaction with the new-vehicle purchase experience (in order of importance): delivery timing (21 per cent), dealer facility (17 per cent), deal (17 per cent), delivery process (16 per cent), sales initiation (16 per cent), and salesperson (13 per cent). 

The study, now in its ninth year, was based on responses from 1,734 new-vehicle owners who purchased their vehicle from January to October 2017. The study was fielded online from August through October 2017.

 

 

Source: VN Economic Times

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