Car sales rose beyond expectations in the first half of this year as consumers took advantage of low-interest bank loans and a reduction in automotive registration fees, automakers said.
Figures from the Vietnam Automobile Manufacturers’ Association showed that nearly 65,400 units were sold in the first six months of 2014, up 31 percent compared to the same period last year.
The association only expected a 9-percent jump.
Imported cars like Mercedes-Benz , BMW, Audi, and Lexus made up 38 percent of the sales volume. The rest were locally-assembled and locally-produced units.
Michael Behrens, general director of Mercedes-Benz Vietnam, said his company sold more than 1,100 cars in the January-June period, the highest figure since it started doing business here 19 years ago and a 70-percent year-on-year increase.
Half of the sales came from C-Class and E-Class models whose prices ranged between VND1.3 billion (US$61,300) and VND3.6 billion ($170,000), according to Behrens.
Car producers said a rise in the newly-rich population contributed to rising sales of imported, high-end cars.
In March, real estate service provider Knight Frank said Vietnam's population of super-rich individuals (e.g. those with a net worth of at least $30 million) will grow faster than in any other country over the next decade.
The UK-based firm expected the group to increase by 166 percent to 293 people in 2023.
Sales of moderately-priced cars also jumped in the first six months.
Ford said it sold 5,300 units between January and June, up 54 percent year-on-year; while Toyota sold 16,650 units -- up 12 percent.
Sales at Vietnamese car maker Truong Hai surged 40 percent in the first half to 17,850 units, accounting for 33 percent of the entire market, according to the company’s communications manager Nguyen Mot.
Car producers said rising sales are being driven by interest rates of as low as 5 percent on bank loans and the January cut in car registration fees from 15 percent to 10 percent in Ho Chi Minh City, the country’s economic hub.
Vietnam's commercial banks have also slashed interest rates on loans for personal consumption as they shift focus from business borrowers to individual customers amid ample deposits and low credit growth.
Mot of Truong Hai said his firm expects sales to reach 23,400 units in the second half of the year when the number of customers typically rises.
The Vietnam Automobile Manufacturers’ Association, meanwhile, predicted that the auto sector will sell a total of 130,000 units this year, a significant rise from last year’s 110,519.