Auto market reaches new pinnacle

Statistics from the Vietnam Automobile Manufacturers’ Association (VAMA) show that in October 22,368 autos were sold, up five percent compared with September, and 50 percent higher compared with October 2014.

THACO remained the best-selling brand with 7,282 autos sold, up 73 percent compared with October 2014; Toyota ranked second with 4,372 autos sold, up five percent; Ford ranked third with 2,139 autos sold, up 39 percent, followed by Honda with 833 autos sold, up 71 percent; GM Vietnam with 794 autos sold, up 119 percent; and Isuzu with 721 autos sold, up 53 percent.

In the first 10 months, total sales volume reached 185,811 autos, a rise of 53 percent compared with the same period last year. These included 137,128 domestically assembled autos, up 50 percent, and 48,683 imported fully assembled autos, up 62 percent.

Continuous rises in auto sales volume since the beginning of this year reflected the recovery of the entire economy and the potential of the domestic auto market. Through two exhibitions organized in October, participating companies sold 5-30 imported autos and several hundred or up to a thousand domestically assembled autos for each brand.

According to the General Statistics Office, Vietnam imported about 11,000 autos worth US$203 million in October, and in the first 10 months, 95,000 autos were imported with total value of over US$2.31 billion, up 82.8 percent in volume and 100.2 percent in value compared with the same period last year.

It is forecast that about 40,000 autos will be sold in the last two months of this year, and the annual sales volume will reach 225,000.

A lucrative market for ASEAN auto manufacturers

Despite continuous rises in sales volume, experts are worried about how domestic auto manufacturers will compete with those from other ASEAN countries after the ASEAN Economic Community is established, gradually reducing taxes on auto imports from other ASEAN countries into Vietnam to zero percent by 2018.

The auto sales volume in Vietnam remains very low compared with many other countries in the region. The Vietnamese auto sector still lacks support industries and faces a low localization rate. The average local content of domestically manufactured autos currently stands at about 7-10 percent.

Toyota Motor Vietnam General Director Yoshihisa Maruta said when import taxes in ASEAN decreased to zero percent, it would be more costly to import auto components for assembly in Vietnam than to import fully assembled autos from Thailand, Indonesia, or Malaysia. Meanwhile, Vietnam still lacks clear policies to implement the national strategy for automobile industry development towards 2020 with a vision to 2030.

Economists are worried that Vietnam would become a lucrative market for automobile manufacturers in the region, and Vietnamese auto businesses would be able just to import foreign products for domestic sale.

Duy Minh