The domestic car market is gloomy as people are not making purchases despite the sharp price falls.
With preferential tariffs beginning in 2020, used luxury cars from CPTPP-member countries will be available in Vietnam.
Vietnam still has to import car parts for domestic assembling. As a result, the production cost is high and domestically made products remain less competitive than imports.
2019 witnessed a fierce race among manufacturers and distributors to reduce prices to attract more buyers.
Despite sale promotion campaigns launched by manufacturers, the car market remained gloomy in the last months of the year.
VinFast, the automobile manufacturer belonging to Vingroup, said it is selling cars at a loss.
Vietnam’s automobile industry not only has to compete with veterans Thailand and Indonesia, but also with new manufacturers in Laos, Cambodia and Myanmar.
The proportion of automobile parts made in Vietnam remains modest because of problems in production costs and quality.
Experts believe that in the immediate time, Laos and Cambodia will not be rivals on the same par with Vietnam.
In the first half of the year, the number of cars imported to Vietnam increased by 500 percent, while some models saw a sharp increase of 650 percent compared with the same period last year.
Vietnam needs to issue special policies for the automobile industry to catch up with other countries in the ASEAN region, said experts at a conference held in Hanoi on Tuesday.
If supporting industries cannot develop and automobile joint ventures continue importing car parts for assembly, Vietnam’s automobile industry will not survive after 2025, analysts say.
CBU (complete built unit) imports have been flooding the Vietnamese market while domestic factories have cut output, raising concerns among car part manufacturers that they may lose jobs.
The Ministry of Industry and Trade (MOIT) has proposed raising luxury tax on some car models with fewer than nine seats.
Experts think the plan to spend $4.3 billion to develop the automobile industry will be in vain.