Inflation, high interest rates put the brakes on auto sales

By Dat Nguyen March 20, 2023 | 06:56 pm PT

Auto sales fell by 27% to 68,402 units in the first two months of the year as consumers tightened purse strings amid rising inflation and credit remained expensive.

Members of the Vietnam Automobile Manufacturers Association reported a 25% drop in sales to 53,544 units.

Truong Hai Auto Corporation, the biggest seller by volume, saw sales fall by a third to 7,208 vehicles.

TC Group, which makes Hyundai cars, reported a 23% decline to 8,963 units, while VinFast saw sales plummet by 76% to 774 units.

Amid the falling demand, carmakers have been offering discounts and subsidizing registration fees.

Both the domestic industry and importers have asked the government to cut registration fees by half.

Vo Quoc Binh, CEO of used car distributor Binh Minh, said the auto market would face great challenges this year without government support.

"Lowering the registration fees can help boost sales but demand will not recover if bank loan interests remain high."