10:52 | 14/06/2017 Industry
(VEN) - Domestic automobile market is in a transition phase with expectations of reduction in car prices in early 2018 when ASEAN import taxes are zeroed out. However, domestic automobile manufacturers are still targeting development of automobile industry, aiming to benefit consumers and exports.
According to a report by the Vietnam Automobile Manufacturers’ Association (VAMA), total vehicle sales in April reached 21,942 units, down 18 percent compared to March and 15 percent compared to the same month last year, including 16,453 domestically assembled cars and 5,489 imported cars. In the first four months of this year, as many as 86,671 cars were sold, an increase of one percent compared to a year ago.
Although there are lots of price support policies for buyers, a decline in purchasing power suggests a transition phase in the domestic automobile market. Buyers are looking forward to the beginning of 2018 when the import tax becomes zero percent, and domestic manufacturers and dealers also offer better prices.
Vietnam is a potential market for car sales, especially for passenger cars of less than nine seats. Therefore, domestic automobile manufacturers are still expanding production to meet market demand despite fiercer competition, and plan to promote exports to the region.
For example, the Truong Hai Auto Corporation and the Hyundai Thanh Cong Auto Vietnam Joint Stock Company invested in the construction of touring car assembly plants in the first quarter of 2014. The Hyundai Thanh Cong Auto Vietnam Joint Stock Company aims to achieve 10-percent growth during the 2017-2021 period, increasing the rate of completely knocked down (CKD) vehicles among Hyundai products available in Vietnam to 100 percent by 2021 and reaching the local rate of 45 percent.
Stable, long-term policies
Le Ngoc Duc, general director of the Hyundai Thanh Cong Auto Vietnam Joint Stock Company, said Vietnam remains a potential market for international automobile manufacturers. Therefore, major automobile brands still have short-term and long-term strategies for the Vietnamese market in particular, and the region in general.
Development policies for the automobile industry were discussed by ministries and departments to submit to the government for approval. Duc said new policies must be divided into three groups: maintaining a stable market, developing and protecting domestic production, and promoting links between car manufacturers and support industry businesses.
The Vietnamese automobile market is experiencing two trends. Major brands with manufacturing plants in ASEAN nations will
strengthen imports, while others will promote assembly and production in Vietnam.