Nearly 11,000 cars were imported into Vietnam in the first four months of 2010, the lowest level in three years, and local importers are struggling with declining sales.
Imports of cars with less than nine seats were recorded at around 7,000 units in the four-month period, even lower than monthly figures last year, news website VnExpress reported Thursday.
Car sellers said they have tried all tactics including price cuts and registration fee subsidies to clear their stockpiles but sales were sluggish.
A dealership owner in Hanoi who wished to be unnamed said the local market has not fully recovered from the economic downturn and banks have tightened control over lending, making it hard for car sales to improve.
"Most companies now just want to sell their cars in order to repay bank loans," he said. "We have even lowered prices by up to VND30 million (US$1,580) per car."
"It's really hard to sell cars now as demand has fallen sharply," said Pham Minh Tuan, director of Hoan Cau Automobile Company. The company now sells around three cars a month, compared with several dozen this time last year.
All car importers said the market will continue to face difficulties at least until the end of this quarter, forcing around 30-50 percent of companies out of business.
Vietnam's government has tried to curb car imports in an attempt to narrow the trade deficit. Both the Ministry of Industry and Trade and the General Department of Vietnam Customs have restricted car imports while the Ministry of Finance is planning to raise maximum registration fees to 15 percent from the current 10 percent.