Car demand up following news of registration fee cut
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Car dealers have seen the number of customers triple after a 50 percent registration fee discount for locally assembled cars was announced last week.
Toyota, Honda, Hyundai, Kia and Mazda dealers in Cau Giay District reported 30 and even 50 customers a day last weekend, compared to the average 10-15 .
The number of signed contracts rose from an average 10 a day to 30.
A Peugeot dealer locked in seven deals on the weekend even though it was often deserted.
Customers were still viewing cars at 8 p.m. during the two days, while on normal days the last customers often leave at 6 p.m., a manager of a Toyota dealer in Ho Chi Minh City said.
“We needed six employees, double from before,” he added.
The surge in demand for cars came as the government announced a decision to cut car registration fees by half for six months starting Dec. 1.
This is the second time in the last two years that such a cut is introduced to mitigate difficulties faced by the auto industry due to the Covid-19 pandemic.
For this reason, accountants and managers had to show up at dealers to finalize contracts when needed.
Some salespersons said they sold two or three cars last week, while before it often took them several days to sell one.
Customers can be divided into two main groups: those who want to prepare for the registration process when the fee drops by half starting Wednesday, and those who want to learn more about cars.
Dealers have ended some prior promotions because of the fee discount, which urge customers to come and make purchases.
“I am selling my existing car to buy a new one,” said Le Luan, a customer, adding he plans to put down a deposit Tuesday fearing promotions would end Wednesday.
Registration fees are calculated based on car prices in each locality. The rates are 12 percent in Hanoi and Hai Phong, and 10 percent in HCMC.
In the first six months last year, 17,600 cars were bought on average each month. In the second half, when the 50 percent cut took effect, sales doubled.
Last year, car sales had fallen by 8 percent to 296,634 units as the Covid-19 pandemic badly affected the economy, hitting incomes and discretionary spending.
Questions & Answers
Q.Which car brands have seen increased customer numbers following the fee discount announcement?
Which car brands have seen increased customer numbers following the fee discount announcement?
Toyota, Honda, Hyundai, Kia, and Mazda dealers in Cau Giay District reported a significant increase in customers. A Peugeot dealer also saw a surge in deals despite previously being quiet.
Q.What was the previous impact of a 50 percent registration fee cut on car sales?
What was the previous impact of a 50 percent registration fee cut on car sales?
When a 50 percent cut took effect in the second half of last year, car sales doubled. This followed an average of 17,600 cars bought monthly in the first six months.
Q.When does the 50 percent registration fee cut come into effect and for how long will it last?
When does the 50 percent registration fee cut come into effect and for how long will it last?
The government's decision to cut car registration fees by half will start on December 1st. This reduction is planned to last for a period of six months.
Q.Why did some dealers have accountants and managers present over the weekend?
Why did some dealers have accountants and managers present over the weekend?
Accountants and managers had to be present at dealers to finalise contracts when needed. This was due to the surge in demand and increased sales volume following the announcement of the fee cut.
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