Chinese-made Trucks to Submerge Others in Vietnam

Chinese-made Trucks to Submerge Others in Vietnam

Three local large-scaled enterprises have begun mass production of Chinese-made cheap trucks and buses in an effort to submerge cars assembled by 11 foreign-invested joint ventures in Vietnam.

The Ho Chi Minh City-based Truong Hai Auto Co. introduced China’s Foton trucks with loads of 1.25-17 tons in Hanoi and Ho Chi Minh City early April 2005.

Tran Ba Duong, CEO of the privately run Truong Hai Auto, said Foton trucks will meet the requirements of Vietnamese people by lower prices, more fuel savings and more durability than South Korean-made ones.

He said retail prices of brand-new Foton trucks are equal to 50 per cent or 60 per cent of the similar products made by South Korean firms. To attract customers, Truong Hai Auto Co. has applied hire-purchase policy in all its 23 sales agents nationwide.

In early April, the Transport Investment Co-operation and Import-Export Corporation (Tracimexco) rolled out nine cheap auto models made with Chinese kits and parts in all its 25 sales agents in the northern and central regions.

Nguyen Phi Long from the Tracimexco Marketing and Sales Department said the nine models including trucks with loads from 700kg to 2.5 tons and buses from eight seats to 29 seats. These models are 20-30 per cent cheaper than South Korean-made ones.

Late last year, Dai Cat Tuong Joint Stock Co. (Dacata) invested VND188.5 billion to build an automobile factory to make Chinese-originated cars in the Dung Quat Economic Zone in central Quang Ngai province.

Dacata will manufacture trucks of less than 2.5 tons with technology from China’s Changjang Auto Group. It is able to turn out 6,000 units in the first phase and 12,000 units in the second stage.

One company in Ho Chi Minh City, which didn’t want to be named, said that it will receive technologies transferred from a Chinese company to produce sedans of 4-6 seats at a price of US$6,000, VAT included.

According to market experts, Chinese cars including trucks, buses and sedans will compete severely with South Korea, Russia and Japan-originated ones in the years to come.

The demand for trucks and buses in Vietnam will increase because the government began removing trucks of over 29 years old and buses of over 23 years old from this year, they said.

According to the Ministry of Transport, Vietnam now has 180,00 trucks, of which 23,000 units have exceeded their operational years and will be removed next year. Each year [from 2007 on], Vietnam has to keep 10,000 outdated cars off the road, it said.

Furthermore, from 2008 on, Vietnam will remove 120,000 cong nong (rural light truck-tractor), which will be replaced by light trucks.

Nguyen Xuan Chuan, deputy minister of industry, said that Vietnam needs 68,000 trucks in 2005 and 127,000 in 2010.

Vietnam also needs to invest in expanding its bus fleet to 35,000 units from 2005 to 2010 to developing its bus network in major cities and provinces. Of the sum, Ho Chi Minh City will need 13,229 buses by 2010 but now it has only just over 2,700 units.

Therefore, Vietnam will still have room for wholly local enterprises to assemble buses and trucks.

Vietnam now has 11 operational foreign-invested carmakers, nearly 20 local auto firms and over 60 parts suppliers.

Suzuki, Isuzu and Hino reaped great successes selling light trucks in 2004 while Mercedes-Benz saw a remarkable rise in minibus sales [297 units], accounting for 50 per cent of the local minibus market.

Vietnam Economic Times