Vietnam Automobile Market: Weak demand puts pressure on profit margin
- In Oct-2023, total sale volume of automobile sector reached 25,639 units (+1% MoM, -30% YoY), sealed the second consecutive month of positive MoM growth. It means the signs of sales-bottoming have appeared from Aug-2023. We anticipate that the trend of recovery will keep on track in 2 months left on this year by some year-end promotion/discount campaigns and the gradual pervading of macro policy into the economy. However, we suppose that the growth would not be enormous as discretionary spendings still hampered by macro headwinds in 2023.
- The issue of large amounts of inventories is not addressed in Q3-2023, which forces automobile brands/dealers to sacrifice its margin to clear all of its. We believe that the tendency of lowering the fixed prices of cars will maintain in Q4-2023, especially by the year-end shopping season, which continues to impact negatively on automobile corporate’s profit
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