Automobile Market Remains 'Hot'

Automobile Market Remains 'Hot'

Statistics from the Vietnam Automobile Manufacturers Association (VAMA), in the first four months of this year, 11 automobile manufacturing joint ventures sold 9,858 automobiles, a sharp increase against 7,450 in the same period last year. This result is against foreign experts' forecast on a possible decline in the number of automobiles sold in the Vietnamese market since the special consumption tax was increased to 40 per cent. This has shown that the Vietnamese market continues to be busy with many potential customers even though prices of automobiles in Vietnam remain higher than other countries in the region and the world.

Prestigious automobile manufacturers gained high sales in the past four months. Specifically, Toyota sold 3,059 units, higher than 2,585 units one year ago; Isuzu, 765 units against 500 units of the same period last year; Ford, 1,111 units in comparison with 1,013 units one year earlier. Vinastar with Mitsubishi products sold 1,175 units, doubling the figure (541 units) last year, and Vidamco sold 1,597 units, nearly doubling last year's figure (873 units). These are impressive figures.

Small and multi-functional automobiles with energy saving are favourite choices of Vietnamese customers, especially when prices of petrol are high and there is not much room for parking. Toyota's seven-seater Zace was the 'red-hot' item in the past four months with 1,254 units sold. As a prestigious manufacturer and pioneer, Toyota Vietnam has decided to market Zace Surt with a luxurious sport design. Another favourite item has been Mitsubishi Jolie of Vinastar, which sold 659 units. Hi-Lander of Isuzu Vietnam saw a sale of 141 units. With the launch of seven-seated Ford Everest, Vietnamese consumers will have more options when they decide to buy a multi-purpose and good-looking car. Matiz and Lacetti EX also saw a sale of over 1,000 units in the first four months.

Nonetheless, Vietnamese consumers have no chance to buy a car at a cheap price. Vietnam-based automobile manufacturers blamed high tax rates of import and special consumption as a reason for high prices of automobiles in Vietnam.

The fact shows that if local manufacturers continue to enjoy protection via tax, only consumers suffer losses as they have to pay high prices while local support industries do not develop much. Manufacturers complained that the Vietnamese market's scale is yet to be large enough to attract spare part and accessories manufacturers. Furthermore, even though special consumption and import tax rates have declined as State management agencies expected, cheap automobiles remain a dream for Vietnamese consumers, if the local market is not opened further.

• Quynh Chi