70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy / Industry
Vietnam leading car dealers struggle with Covid-19 impacts
Ngoc Thuy 08:30, 2021/02/19
While car prices in 2020 were significantly lower compared to the pre-Covid-19 period, customers had become more cautious in spending, leading to an 8% year-on-year drop in car sales to 296,634 units.

Major car dealers in Vietnam, including Savico, Haxaco and City Auto, posted modest return on sales (ROS) of 1-2% in 2020, mainly due to customers tightening their belt amid a difficult Covid-19 year.

 Customers at a car dealer center in Le Van Luong street. Photo: Pham Hung

“The pandemic had led to fierce competition in car prices, causing a downturn in the company’s business performance,” stated Savico in its financial statement.

Savico, a distributor of major car brands of Toyota, Volvo, Honda, Mitsubishi, recorded the highest revenue among the three with VND16.13 trillion (US$700.2 million), down 12% year-on-year, and profit of VND224 billion (US$9.72 million), or ROS of 1.38%.

While car prices in 2020 were significantly lower compared to pre-Covid-19 period, customers had become more cautious in spending, leading to an 8% year-on-year drop in car sales to 296,634 units, data from the Vietnam Automobile Manufacturers’ Association (VAMA) noted.

City Auto, a major distributor of Ford and Huyndai, suffered a same fate with a decline of 11% year-on-year in revenue to VND5.67 trillion (US$246.1 million) and net loss of over VND4 billion (US$173,800).

Last year, City Auto predicted a challenging year of 2021 for the automobile industry following a sharp drop in market demand.

In a letter to the Ho Chi Minh City Stock Exchange, City Auto attributed its negative business performance to lower car sales volume.

In contrast, Haxaco, a leading Mercedes-Benz car dealer in Vietnam, recorded a rise of 8% year-on-year in revenue to VND5.57 trillion (US$241.8 million) and after-tax profit of VND125 billion (US$5.42 million), up 150% year-on-year.

A senior official at Haxaco said the firm took advantage of the government's policy of reducing 50% of the registration fee for domestically-produced cars to boost sales revenue. However, Haxaco’s ROS remained at a modest rate of 2.24%.

A study from SSI Securities Corporation suggested 2021 could start the upward trend of Vietnam’s automobile industry with a 16.3% year-on-year growth rate in terms of car sales number, citing high demand from the domestic market for cars.

RELATED NEWS
TAG: Vietnam car dealers Covid-19 pandemic nCoV automobile industry Mercedes Benz Hyundai Savico Haxaco Toyota
Other news
15:20, 2024/02/21
Hanoi, Japanese firms join hands for aerospace component production
The move is a concrete manifestation of the robust cooperation between the two nations.
12:55, 2024/02/20
Hanoi encourages firms to sell to foreign distribution networks
The Hanoi People's Committee has approved a project focusing on the development of export and import markets for sustainable growth.
13:17, 2024/02/18
Site clearance is key for 500kV power line
The use of forest land for the transmission line remains the biggest obstacle that various ministries and agencies need to resolve, given the short time available for site clearance.
17:02, 2024/02/17
Hanoi mayor calls on hi-tech firms to boost production after Tet
The development of high technologies is one of Hanoi’s priorities in 2024.
18:05, 2024/02/16
Gov’t expects “rescue plan” for Vietnam Airlines in Feb
Several forecasts suggested that global air traffic will gradually recover, and the business activities of Vietnam Airlines are expected to yield more positive results in 2024-2025.
15:34, 2024/02/14
A booming year for Vietnam’s e-commerce
E-commerce has gradually changed the shopping habits of Vietnamese people to keep up with the modern consumer trends worldwide.