Many Vietnamese automakers have signed deals to use Chinese technology and components to manufacture cheap cars in the country as they have witnessed slim imports of used cars, local media said.
The first Chinese technology-used cars will likely be launched in the fourth quarter of 2006, it said.
“We decided to use Chinese technologies and parts to make cars because imported used cars won’t be a major force in Vietnam’s market due to the imposition of high tariffs,” a car company said.
TMT Co., under Vietnam Motors Industry Corp. (Vinamotor), has signed a $10-million contract with China First Automobile Group (FAW) to produce, assemble and trade 1.0L and 1.3L four-seat Tidy sedans in Vietnam.
“We will produce 5,000 units a year in the initial stage. Each unit will be priced around $10,000, much lower than similar sedans made by foreign-led joint ventures in the country,” a TMT official said.
The economical Tidy sedan is expected to become the rival of other popular models like Daewoo Matiz, Suzuki Vitara or Daewoo Gentra. The Tidy sedan, a product of FAW and Toyota, has been accepted in the US market.
In May, Trading Services and Foreign Trade Logistics JSC put its Huu Nghi auto plant into operation in Haiphong City, which is designed to assemble sedans, 7-seat and 12-seat vans and 5-ton trucks.
The private-run VinaXuki has equipped technologies from China’s Chang Cheng and Hua Shen groups to make vans and SUVs.
According to the Vietnam Society for Automotive Engineers (VSAE), six or so enterprises are now willing to assemble and sell Chinese cars in Vietnam.
At a price of around $10,000, Chinese cars are likely to sell well in Vietnam, said Phan Dang Tuat, director of the Industrial Strategy Institute.
However, according to Mr. Du Quoc Thinh, secretary general of VSAE, Vietnamese customers will pay little attention to prices focusing rather on quality. Further, existing foreign-led joint ventures will cut their prices to drive Chinese cars out of the market as had been done earlier when cheap Chinese motorbikes entered Vietnam.
Vietnam’s automotive industry suffered a 44 per cent fall in production to 12,000 automobiles in the first five months of this year, including 3,590 units made by Vietnamese firms, principally due to market-freezing policies. The tax cuts on imported new cars and permission to import of used cars into the country are core reasons for the frozen market.
VNexpress
Vietnamese
