Several manufacturers said they are likely to see sales drop by 25 to 30 percent compared to last year if the market remains dampened.

T., owner of two Honda authorized dealers (HEAD) in Ho Chi Minh City’s Tan Binh District, said sales in December may only be some 70 percent of the figures last month.

Other HEAD owners said although Honda Vietnam has launched many supporting and promotional programs for customers, consumption remains low.

“Customers will enjoy discounted prices and receive gifts, but many HEAD’s are now likely to fail to meet sales targets,” a HEAD representative said.

Many motorbike dealers said they have even agreed to sell at lower prices than suggested by the manufacturers, yielding modest profits of VND500,000 per vehicle, but this has still failed to improve the situation.

Duong Thi Hoa, a textile worker, said she wanted to exchange her Chinese Wave bike for a new one, but cannot afford it due to economic troubles.

“I don’t know if I will still be able to receive a bonus for the new year,” she said.

Masayuki Igarashi, new CEO of Honda Vietnam, said the company had to adjust its business plan to deal with the economic malaise.

“The target of selling 2.3 million motorbikes this year must be adjusted due to difficulties from HEAD countrywide,” he said.

Two of Honda’s manufacturing plants in Vinh Phuc province are capable of making up to 2.15 million bikes a year, but the capacity has been reduced to only 1.93 million vehicles.

Automobiles suffer too

Automobile dealers are also running a number of promotional programs, but customer responses are just too modest.

“Customers are hesitant to buy a new car, as they are still waiting for bank loan interests to go down,” said Phan Duong Cuu Long, CEO of Saigon Ford.

“Moreover, many banks have tightened lending to buy cars,” he added.

In late November, a large dealer of Hyundai in HCMC even had to shut down due to huge losses of millions of dong a month.

Tuoi Tre News - December 11, 2012