Automotive market on a rise

How do you assess the Vietnamese automotive market?

The Vietnamese automotive market is on the rise with overall growth of more than 50 percent by August 2015. Of this, commercial vehicles accounted for half of its growth in both the completely knocked down (CKD) and the completely built-up (CBU) markets. In terms of passenger cars, the CKD market has recorded growth of more than 40 percent, while the CBU market has increased by around 30 percent since the beginning of the year. New CBU imports currently account for a quarter of domestic passenger car market. The Vietnamese automotive market’s growth will keep going and exceed 230,000 vehicles in 2015.

Fluctuations in terms of import duties or exchange rate are forecasted to have an impact on the Vietnamese automotive market. Import duties for big-capacity cars will fall slightly but excise taxes could strongly increase depending on engine displacement. This tax calculation method is expected to be applied in 2016.

How will free trade agreements (FTAs) affect the Vietnamese automotive market? What should Vietnam do to develop this sector?

Vietnam signed many FTAs and concluded negotiations on agreements such as the Trans-Pacific Partnership and the EU-Vietnam Free Trade Agreement. These agreements will only become effective in a few years, so their impact will be insignificant in the short term. The ASEAN-Vietnam FTA could have some impact on the automotive market because assembly lines must meet 40 percent of the local content value to enjoy tax incentives. The number of such brands is likely to be limited as assembly lines were constructed for the local market with no export right. This is also the issue of different emission standards and the left or right hand drive markets. Other FTAs between ASEAN and Japan, the Republic of Korea and China will benefit the Vietnamese automotive market but the actual implementation schedule remains unclear.

VIMS 2015 attracted thousands of visitors. What were the highlights of the show for you?
VIMS 2015 was the first motor show displaying passenger car brands mostly from Europe such as Germany’s Audi, BMW and Porsche, the UK’s Jaguar, Land Rover and Mini and France’s Renault in addition to Chinese Taipei’s Luxgen and China’s BAIC. Covering 4,000sq.m, the show attracted more than 70,000 visitors.

VIMS 2015 was aimed at customers who favor imported cars. Consumers were also offered an opportunity to look at the latest models. And nearly 200 contracts were signed at the end of the show.

Why was Hanoi chosen to organize VIMS 2015?

Hanoi was selected for VIMS 2015 as it’s an important market. There hasn’t been a motor show in Hanoi for three years. Each brand displaying at VIMS 2015 was able to surprise visitors.

VIMS 2015 was expected to provide a new standard for the Vietnamese automotive market.

Nguyen Huong