Vietnamese auto market: expensive cars sell better
For most Vietnamese consumers, a house and car are two of the most valuable assets.
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A car dealer said that Vietnamese tend to buy expensive versions of the same model with more features than cheaper ones with fewer features.
Tien, the owner of a fashion shop in Hanoi, said he had to consult all family members before buying a car.
“The car has to undertake two important tasks – serving my work and my family’s travel plans. It must be comfortable, pleasant and durable. If I just need a car to serve my daily routine works, I would choose Toyota Fortuner, which is cheap. However, since the car is used for different purposes, I finally decided to buy a Fortuner V, the second most expensive version of the model,” he said.
Cuong, the owner of a construction company in Hanoi, said car is different from lamp as the former will be serving the owner for a long time and is a valuable asset which is not easily replaced.
Cuong decided to buy a Ford Ranger Wildtrak 3.2L, VND100 million more expensive than other versions of the model.
On auto forums, many people admit that before going to showrooms, they intended to buy a lower-priced car, but after seeing different car models, they chose more expensive cars, despite the higher selling prices.
Automobile manufacturers understand what buyers think. That is why when releasing the manufacturers’ suggested retail prices, they always declare the prices of the cheapest versions.
The representative of an automobile manufacturer said that the cheapest versions are the choice for customers who buy cars for commercial purposes, while individual customers tend to buy more expensive versions with more features.
Taxi and travel firms, for example, choose Innova E, while individual customers choose Innova G.
This is because transport firms want to minimize costs by buying cheap cars, while individual consumers want cars for entertainment and relaxing, and therefore, accept the price which is VND60 million higher.
By 2016, Vietnam had 173 automobile manufacturers and assemblers, of which 56 enterprises make cars from separate parts and 117 make products from base vehicles. Most of them have small scale operation.
Car prices in Vietnam are nearly two times higher than in other countries in the region such as Thailand and Indonesia, and much higher than in countries with developed automobile industries such as the US and Japan.
