Vietnamese consumers expect to see “car price wars” when the government allows the import of used cars as of May, a move which is expected to drastically lower auto prices.
Vietnam's annual per capital income remains one of the world's lowest at around US$500, but its car prices are among the highest due to high tariffs and taxes. For example, a Toyota Camry sedan - an entry level model - sells for US$65,000 compared to around US$20,000 in Japan.
A recent government decree on imports and exports in the 2006-10 period states that foreign cars which have been used for less than five years are eligible to be imported from May 1.
The allowance of importing used cars, which must not exceed five years old dating from the manufacturing date to the import date, and a potential entry wave of low-cost Chinese automobiles would drive car prices in Vietnam down by some 20 per cent, local Tien Phong Daily said.
The main import markets of Vietnamese firms include the United States, Australia, Laos, and Cambodia, it said. The predicted influx of secondhand cars and new Chinese vehicles will force automakers in Vietnam to lower their prices. In addition, many local firms are preparing to assemble Chinese cars.
Potential buyers have already delayed purchases, causing vehicles sales by the 11 foreign automakers in Vietnam to plummet 36 per cent in January compared to sales from the same month last year to 1,517, the Vietnam Automobile Manufacturers Association said.
Toyota Vietnam, Ford Motor Vietnam and Vidamco have announced cuts to their list prices.
In January, Vietnam spent US$28 million on importing 1,400 automobiles, up 4.1 per cent on year in volume but down 7.6 per cent in value on year.
Customers in the country paid around US$280 million to import 17,000 cars last year, down 13.2 per cent against 2004.
Pioneer, Thanh Nien
Vietnamese
