A Mercedes car showroom in HCM City. In the 7th lunar month, traditionally considered the ghost month, many consumers are hesitant to make major purchases. — Photo of Topbank.vn

The current state of the local car market is being significantly affected by a mix of traditional beliefs and policy uncertainties, according to car experts.

In the 7th lunar month, traditionally considered the ghost month, many consumers are hesitant to make major purchases like for a vehicle, leading to a sharp drop in sales for car companies. This month is often associated with a general reluctance to buy valuable assets due to superstitions.

Adding to this, there's growing confusion and frustration among consumers regarding the potential reduction of registration taxes for domestically assembled vehicles. Despite ongoing discussions and proposals, no definitive policy changes have been communicated, leaving the market in a state of limbo.

For those who have already purchased vehicles but are awaiting registration tax reductions, the situation is particularly challenging. Consumers who have financed their car purchases through bank loans face additional pressure, including potential fines for late disbursement and the cost of storing their vehicles while waiting for tax clarity.

To counteract the market downturn, several car manufacturers have introduced substantial registration fee incentives to attract buyers.

Until August 31, Toyota is offering a 50 per cent registration fee reduction on several models, including the Vios, Veloz Cross, Avanza Premio and Yaris Cross. This incentive translates to price reductions ranging from VNĐ23 to VNĐ38 million, depending on the model.

Starting August 5, Honda Vietnam announced a similar incentive program, offering 50-100 per cent registration fee discounts on models like the City RS, CR-V, HR-V, and BR-V. The Honda Accord also sees discounts up to VNĐ220 million.

Mitsubishi's incentives vary, with some models receiving up to 100 per cent registration fee support, translating to reductions ranging from VNĐ23.5 to VNĐ136.5 million.

While these incentives provide some relief and hope for consumers, the uncertainty surrounding potential tax reductions continues to overshadow the market. The Ministry of Finance has proposed that the government reconsider the tax reduction policy due to concerns about international trade commitments, further complicating the situation.

While car manufacturers are actively trying to stimulate the market through incentives, the lingering uncertainty about registration tax reductions and traditional superstitions about buying valuable assets during the ghost month contribute to a generally subdued market atmosphere.

Sales up nine per cent in July

Car sales in Việt Nam in July increased nine per cent from the previous month to 28,920 units, the Vietnam Automobile Manufacturers’ Association (VAMA) announced on August 13.

In terms of vehicle origins, 13,788 locally-assembled cars were sold in the month, up six per cent. Deliveries of completely-built units (CBUs) expanded 11 per cent to 15,132 over a month earlier.

During the seven-month span, VAMA members sold a total of 163,804 autos, a year-on-year rise of one per cent, with the sales of domestically produced units falling 12 per cent to 81,637 units and imported vehicles rising 19 per cent year-on-year to 82,167 units.

Car dealers are offering incentives for customers to promote sales in the 7th lunar month, which started on August 4. The month is traditionally considered taboo by most Vietnamese for activities concerning large sums of money such as purchasing real estate and cars. — VNS