Vietnam’s truck market is experiencing a challenging period, prompting many truck sales companies to sound the alarm. Declining sales, rising costs, and policy changes are creating a perfect storm for the transportation and distribution industry, pushing truck dealerships into unprecedented difficulties.
A representative from a truck sales company shares difficulties amidst the bleak market
Sales “Plummeting” and Inventory Piling Up
One of the most critical issues facing truck sales companies is a significant drop in sales. Previously, the truck market was vibrant with high demand for freight transportation, but the business landscape has completely changed.
This situation arises from several contributing factors. Macroeconomic difficulties have caused many manufacturing and business sectors to scale down, leading to a decrease in transportation demand. Infrastructure construction projects are also stalled or delayed, reducing the need for trucks to serve construction sites.
Additionally, high fuel costs are a major obstacle. Fluctuating gasoline and diesel prices push truck operating costs to alarming levels, forcing many transportation businesses to cut back on investments in new vehicles. Instead of buying new trucks, they tend to extend the use of old vehicles or seek more cost-effective transportation solutions.
Consequently, truck inventory at dealerships is piling up. New models, specialized vehicles, and even popular truck lines are struggling to find buyers. This situation not only puts pressure on the cash flow of truck sales companies but also creates a risk of deep discounts to clear inventory, affecting profits and the financial health of businesses.
Cost Burden and Competitive Pressure
In addition to declining sales, truck sales companies face increasing costs. Vehicle import costs, transportation costs, warehousing costs, labor costs… all tend to rise, especially in the context of inflation and exchange rate fluctuations.
At the same time, the truck market is becoming increasingly competitive. Besides traditional truck brands, the emergence of many new truck brands, especially electric and clean energy trucks, has created greater competitive pressure. Truck sales companies must constantly innovate, improve service quality, and offer attractive promotions to attract customers.
However, in a bleak market, price competition becomes prevalent, leading to the risk of “selling at a loss” and reduced profits. Many truck sales companies, especially small and medium-sized enterprises, are struggling to maintain operations and face the risk of bankruptcy.
A deserted truck showroom, reflecting the difficult business situation of companies
Proposed Solutions and Hope for the Future
Faced with a “do-or-die” situation, many truck sales companies have called for support from state management agencies. Recommendations focus on reducing taxes and fees, facilitating access to preferential loans, and implementing policies to stimulate the market.
Some proposed solutions include:
- Reducing import taxes on trucks and components: Helps lower vehicle prices, increase competitiveness, and stimulate consumption.
- Supporting loan interest rates: Makes it easier for transportation businesses and individuals to buy trucks on installment plans with low-interest rates, reducing financial pressure.
- Promoting public investment in infrastructure: Creates greater transportation demand, thereby increasing truck sales.
- Developing preferential policies for electric and clean energy trucks: Encourages the trend of switching to environmentally friendly vehicles, creating new momentum for the market.
- Strengthening vehicle weight control: Ensures fair competition and protects transportation infrastructure while creating the need to replace old, overloaded trucks.
Although the truck market faces many difficulties, businesses remain optimistic and hopeful for recovery in the future. With self-improvement efforts, support from the government, and the recovery of the economy, the Vietnamese truck industry is expected to overcome this challenging period and continue to contribute to the country’s development.
References:
- Vietnam Commercial Vehicle Market Report 2024, Vietnam Automobile Manufacturers Association (VAMA).
- Vietnam Truck Industry Analysis, ABC Securities Company.
- Synthesis of opinions from truck sales businesses in Hanoi and Ho Chi Minh City.
