An overview on automotive industry in Vietnam

Author Cong Tri Tran
Co-Author Danh Chan Nguyen, Le Hung Duong
DOI

Country : Vietnam
Subject : Transport

Keywords : automobile industry, supporting industries, orientation

Abstract

VAMA (Vietnam Automobile Manufacturers’ Association) reported that 28,899 products were sold in October, an increase of 21 percent over the month before, and 18 percent over October 2017. As such, 214,466 products have been sold by VAMA’s members this year. Mazda’s products sold the best with 26,165 products, followed by KIA (23,310) and Honda (21,054). Ford Vietnam had sales in October that were 12 percent higher than the same period last year. Its Ford EcoSports, with sales up by 59 percent, continued to be the bestseller in the small-size SUV market segment. As such, 214,466 products have been sold by VAMA’s members this year. Mazda’s products sold the best with 26,165 products, followed by KIA (23,310) and Honda (21,054). Imports are selling well in the last months of the year. The strict requirements stipulated in Decree 116 blocked car imports to Vietnam, but the situation has improved. Commenting about Vietnam’s automobile market in the long term, Mercedes Benz Vietnam’s CEO Choi Duk Jun said it would follow Chinese or South Korean markets. As families have few children and are used to purchase by instalments, the buyers tend to be younger and more willing to spend money on cars. In 2014, the Prime Minister approved the automobile industry development strategy by 2025. In 2016, regulation on policies to implement the strategy got approval. Most recently, in late 2017, the government released a decree on the conditions for manufacturing, assembling, importing and providing maintenance services. The decree shows Vietnam’s view that the auto industry is an important driving force for industrialization and modernization, with stable, consistent and long-term policies. Many well-known brands are present in Vietnam, such as Toyota, Ford, Honda and Mitsubishi, as well as Vietnamese brands like Thaco and VinFast. A report found that the localization ratios are 55 percent for trucks, and 45-55 percent for passenger cars with 24 seats and more.

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