10:45 | 20/05/2015 Society
Analysts don’t think Tata Nano, the cheapest car model from India, would sell well in Vietnam, saying that though Vietnam is a poor country, its people only accept luxury products.
ata, India’s largest automobile group, has signed a cooperation agreement with Vietnamese TMT JSC under which TMT will begin distributing Tata’s products in Vietnam from August, including Tata Nano, introduced worldwide 2009 as the cheapest car model, priced at US$2,500-5,000.
TMT’s chair Bui Van Huu said Tata Nano would be sold at below US$10,000 in Vietnam, price much lower than that of domestically assembled cars and imports.
Despite the expected low selling price, car dealers said they don’t think Tata Nano will sell in Vietnam.
“Tata Nano won’t sell. Vietnamese won’t buy it even though it is cheap. Chinese cars and motorbikes once penetrated the Vietnamese market, but they have gone,” said Tam from Nhat Han Auto Showroom on Nguyen Van Huyen Street in Hanoi.
“Vietnamese favor foreign branded products. They only spend money on high-quality products,” he said, adding that Vietnamese have low income but don’t accept low-cost cars, because they believe the cheapest are the lowest quality.
Chu Manh Hung from Hyundai Pham Hung noted that the price of Tata Nano remains questionable in Vietnam.
“Though it is cheap in India, I am not sure if it is cheap in Vietnam,” he said.
Hung explained that the cars to be imported may have different designs. “In general, in order to cut down production costs, manufacturers may change the designs. If so, the prices must be different,” he said.
Though believing that Tata Nano may get cheaper in the future, once it is assembled in Vietnam, Hung still does not think Tata would succeed.
Tata Nano versions have very simple designs, the key to help cut down expenses. There is only one windscreen wiper, one lock, one rearview mirror and no backdoor. According to Autocar, there is no air-conditioning system and no airbag, the most important protective device.
Hoang Trung Thang, an officer of a pharmacy company in Hanoi, said that Tata Nano will not sell if Tata brings exactly the version sold in India to Vietnam. However, if the manufacturer sells cars with associated devices, it may attract some Vietnamese who want a car that fits their pockets.
Meanwhile, Tuan from Hyundai Long Bien in Hanoi, remains cautious about expected purchasing power.
In fact, “India” is a brand well known to many Vietnamese. Some Indian car models have been selling very well in Vietnam. Hyundai Grand i10 from India is an example.
Source VOV News