Car sales in Vietnam in 2020 dropped 8% year-on-year to 283,983 units across all segments despite a strong increase seen in the fourth quarter, the latest data released by the Vietnam Automobile Manufacturers Association (VAMA) showed.

The outlook of the car market for next year remains dim following a turbulent year in 2020.

Automobile companies are accelerating fast to reach their annual targets after facing difficulties in the first half of the year.

The outbreak of the coronavirus has had negative effects on global supply chains in the world’s automobile industry.

Prime Minister Nguyen Xuan Phuc has just signed Decree 70 allowing the cut of 50% of the registration fee for customers who buy locally-produced and assembled automobiles, effective June 28.

The sales of automobile surged 62 percent month-on-month in May following the end of social distancing measures, according to the Vietnam Automobile Manufacturers’ Association (VAMA).

Vietnam imported up to 140,000 cars in 2019 worth a total USD3.16 billion, up 84% on-year, with the majority from Indonesia and Thailand.

Foreign investment in six priority industries under the industrialization strategy accounted for 27% of total registered capital in Vietnam from 2013 to March 2019, focusing on electronics, automobiles and energy saving.

The positive results posted by Vietnamese manufacturers in support industries over the last 20 years have come mostly on the back of the development of the local motorcycle industry. 

The move is aimed to help develop the automotive supporting industries, particularly as Vietnam still has to import massive basic materials for domestic car production.

Car dealers at many firms in Vietnam are complaining about slow sales as it approaches the end of 2019.

Vietnam Supporting Industries Forum 2019 held on November 28 in Hanoi.

VietNamNet Bridge - National Assembly deputies, when consulted by the Finance & Budget Committee about the luxury tax law amendment, have proposed to lower the tax on cars.

The Government’s already-approved development strategy for the auto industry could help Vietnam meet domestic demand and join the world’s production chain but specific policies must be in place to help the nation realize preset goals.

 VietNamNet Bridge – Vietnam has become one of the hottest luxury car markets targeted by car manufacturers, with luxury car manufacturers choosing some of their most luxurious and expensive car models in Vietnam.

 Local auto maker and assembler Truong Hai Auto Corporation (Thaco) has once again overtaken the long-time market leader Toyota Vietnam as the biggest sales achiever in the country.

 VietNamNet Bridge – The automobile and car part manufacturing has the transfer pricing rate of 51 percent, the third highest to finance & insurance and textile & garment.

 VietNamNet Bridge – Analysts have noted the car imports to Vietnam recently are mostly luxurious models and they are from ASEAN countries.

A lot of automobile manufacturers are considering stopping assembling cars in Vietnam and shifting to distribute cars in the market. If so, Vietnam would not have its automobile industry, and the forecast car price reductions would be far away.