Several car dealers in Phnom Penh said Tuesday that since the July national election, the real estate slowdown and the global financial crisis have sparked a drop in the high sales that have flooded the capital’s streets with automobiles.
In recent months, customer traffic at the RM Asia’s Ford dealership in Phnom Penh has dropped from about 10 potential buyers per day to sometimes as few as one, according to manager Seng Voeung. He added that the dealership has experienced another problem: customers backing out of deals because of the economy.
“They come to take a look and then go back to sell the land so they can buy,” he said. “At the end, they say all contracts are on hold [because of low real estate prices] and they can’t buy right now.”
RM Asia’s dealership and others in Phnom Penh say they don’t anticipate they will make sales targets for the fourth quarter of the year. Seng Voeung said he anticipated the slump to continue at least until mid-2009.
At RM Asia, he said, sales for the fourth quarter will probably hit 70 percent below the 135-vehicle mark they set last year.
The sales decline will likely leave the company with sales of about 410 vehicles for the year, a slight increase compared to the 406 cars sold in 2007 but well below the 450-car goal for 2008.
The car sales slump is being reflected in the number of newly registered cars, according to the Ministry of Public Works and Transport.
In 2007, an average of 2,000 new cars were registered every month, according to the ministry. But Peou Maly, deputy director of the ministry’s transportation department, said recently only about 500 new cars per month have been registered.
At TTHK Co, Cambodia’s licensed Toyota dealership, third quarter sales dropped 25 percent below the goal of about 80 vehicles per month, said TTHK general manager Ly Bunhay.
“It’s still higher compared to 2007 but if you compare to the first quarter of 2008 it’s lower,” he said. In the first quarter the dealership unloaded more than 390 vehicles, he said, adding that because of those sales earlier in the year the dealership should still be able to meet its goal of 1,000 vehicles for the year.
Since 1993, TTHK has increased its annual sales goal every year, but the dealership will likely keep it the same in 2009, Ly Bunhay said. Even that projection is based on the hope that banks offer an increasing number of car loans, he added.
“So far it’s a little bit tough because banks are selecting the customers very closely,” he said. “We are hoping more banks become players in car loans.”
At 168 Car Sales on Kampuchea Krom Boulevard, sales have declined 40 percent since the election and the business is only breaking even, said its owner Ly Huot.
“Most clients in the latest months are bargaining so much and they complain they are earning less,” he said, declining to say how many cars he actually sells per month.
“Sooner or later it will be better,” he said.