Used Car Market Booms Amidst New Car Slump
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The used car market is experiencing a surge in activity in the early months of the year. Photo: Đinh Thông. |
The overall new car market in Vietnam is facing challenges. A report from the Vietnam Automobile Manufacturers Association (VAMA) shows that the total sales of the Vietnamese car market have been declining for the first two months of the year, with many car models experiencing zero sales.
However, market activity in the used car segment indicates that the demand for pre-owned vehicles among Vietnamese consumers remains strong.
Used Cars Gaining Momentum
Speaking to Tri thức – Znews, Mr. Duc Phuc, a representative of Thien Moc Auto, reported that the used car market has shown unexpected developments in the early part of the year.
“Typically, the period after Tet in previous years has seen a slowdown in the used car market as people prioritize buying new cars before the holiday. However, this year, various factors have contributed to a shift in consumer behavior, with many opting to purchase used cars after Tet, leading to a surge in activity in the used car market,” Mr. Duc Phuc explained.
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The used car market is experiencing a surge in activity, contrasting with the situation in the new car market. Photo: Đ.P. |
According to the representative of the used car dealership in Hanoi, one of the reasons for this trend is the shortage of used car supply prior to the Tet holiday. This resulted in unmet demand for vehicles, leading to a surge in transactions after the holiday period.
Mr. Duc Phuc also noted that the early months of the year coincide with the end of the preferential excise tax program for domestically assembled cars. Consequently, despite efforts by car manufacturers and dealers to offer various incentives and promotions, new car prices remain higher compared to the latter half of 2023.
“Therefore, consumers are turning to used cars with comparable quality to new vehicles but at a significantly reduced cost,” concluded Mr. Duc Phuc.
Supply Increase, Price Stability
Currently, many car manufacturers and dealers are implementing promotional programs or adjusting the list prices of vehicles in favor of customers. This is expected to put some pressure on the used car market.
Specifically, Toyota has reduced the list prices of a range of its cars in the Vietnamese market since the beginning of the year. Among these, the Toyota Vios has seen the most significant reduction of 47 million VND, bringing the price down to around 458-545 million VND. The Toyota Veloz Cross has also been reduced by up to 38 million VND, while the Toyota Raize now has a list price of 498 million VND.
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Toyota has cut prices by tens of millions of VND for various car models in the Vietnamese market. Photo: Minh Quân. |
Hyundai Creta has also been discounted by up to 41 million VND, bringing the price of the Standard version to 599 million VND. Mitsubishi Xforce, although not yet available to Vietnamese customers, has been reduced by 19-21 million VND, with a list price ranging from 599 million to 680 million VND depending on the version.
According to Mr. Duc Phuc, the majority of used cars have relatively stable prices. Some models, such as the Mazda3 and Mazda CX-5, have shown a tendency to increase in price despite being a year older. On the other hand, the pressure from car manufacturers’ price cuts and incentives has led to a slight decline in prices for used cars such as the Toyota Vios, Hyundai Accent, and Honda City in the secondary market.
Currently, cars in the A to C segments, such as the Kia Morning, Hyundai Grand i10, VinFast Fadil, Toyota Vios, Hyundai Accent, Mazda3, and Kia K3, are attracting significant interest from used car buyers.
“In today’s secondary market, used cars like the Mazda CX-5, Hyundai Tucson, Mitsubishi Outlander, and Mitsubishi Xpander are also in high demand, especially those with well-maintained exteriors and low ODO readings,” said Mr. Duc Phuc.
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The trading of used cars in the secondary market has shown growth in the early part of the year. Photo: Đ.P. |
It is worth noting that the supply of used cars in the secondary market is currently increasing compared to the period before Tet. This factor has also contributed to keeping the prices of used cars from rising too much, or even decreasing for some models, despite the growing demand for used vehicles.
Nevertheless, according to Mr. Duc Phuc, the current supply in the secondary market can only meet a portion of the demand for used cars. He revealed that his dealership, Thien Moc Auto, frequently faces stockouts at various times.
“From the perspective of a used car dealer, I hope that the prices of used cars will remain stable while allowing for a slight reduction in depreciation based on the period of use. This will help used car sellers mitigate losses, while buyers will receive value commensurate with their investment,” said Mr. Duc Phuc.
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