Vietnam Car Sales May Shrink on Financial Market Fluctuations

Vietnam car market is much likely to cool down due to effects of the financial market fluctuations, local media cited analysts on February 28.

 

Vietnam’s key index has fallen nearly 40 per cent since mid-October and a score of local investors are still trapped with their shares. Worse still, the local property market is suffering from the government financial adjustments leading a sharp down trend recently, a senior analyst said.

 

Meanwhile, commercial banks have to increase interest deposit rate in response to the country’s tighten monetary policies, the New Hanoi newspaper said. The Asia Commercial Bank has so far raised the rate to 1.5 per cent per month, An Binh Bank at 1.3 per cent upwards, and many even have shortened borrowing time period.

 

“We feel hard to get a bank that can lend VND400 million for our personal spending. Many have raise interest rate by 30 per cent” said a car buyer in Hanoi.

 

Another buyer in Ho Chi Minh City is thinking of abandon his plan to purchase a VND500 million car though he deposited to car dealer VND10 million.

 

If Vietnam’s financial market keep going up and down as it is, the car market will inevitably affected, said Head of Business Department of Toyota My Dinh, Nguyen Duy Dat.

 

However, according to Pham Huu Dat, a car dealer in Honda Vinh, their business has not yet affected from the banking interest deposit rate as the number of car buyer in monthly installment only account for 30 per cent of the total.

 

Vietnam-based car dealers sold 80,392 cars in 2007 and 12,084 units in January, said Vietnam Automobile Manufacturers Association. (www.ktdt.com.vn))