After fast growth, domestically assembled cars face downtrend

The year 2020 witnessed many ups and downs of the car market. In H1, demand dropped dramatically because of Covid-19, but in H2, cars sold well thanks to the preferential vehicle registration tax.

After fast growth, domestically assembled cars face downtrend

Domestically assembled cars dominate market

The Vietnam Automobile Manufacturers' Association (VAMA) reported that 141,625 products were sold in July-November 2020, which was higher than that of the same period of the year before (134,710). It included 90,790 domestically assembled cars, exceeding the 74,000 products in the same period of 2019.

The figures showed the strong rise of the domestic automobile industry. Most of the bestsellers in the top 10 in the first 11 months of 2020 were domestically assembled products, including Toyota Vios with 26,198 cars sold, Hyundai Accent with 17,522, Hyundai Grand i10 14,653, Kia Cerato 10,223, Mazda CX5 9,948 and Hyundai Santa Fe 9,462.

High attention was paid to VinFast Fadil, which had impressive sales growth in 2020. The model has been at the No 1 position in the A-class segment since September 2020, with the number of sold cars rising from 1,515 in September to 2,816 in November.

From July to November, 8,616 VinFast Fadils were sold, higher than the 8,239 Hyundai Grand i10s sold during the same time.

Analysts pointed out a noteworthy feature of the automobile market: Vietnamese brands have step by step asserted their positions against foreign invested enterprises. Truong Hai Automobile leads the market in sales, while TCMotor has surpassed Toyota Vietnam to gain the No 2 position.

Explaining the high growth rates of domestically assembled models, Nguyen Minh Dong, a respected automobile expert, attributed it to the 50 percent vehicle registration tax reduction applied to domestically assembled products and the government’s imposing a zero percent tariff on imported car parts that still cannot be made domestically.

Meanwhile, manufacturers themselves slashed selling prices of many models, thus making cars more affordable.

 

The 50 percent vehicle registration tax cut allowed customers to save VND15-270 million when buying domestically assembled cars. And the zero percent tax rate on car part imports cut production costs by 2-3 percent.

Downtrend in 2021?

However, challenges are ahead for domestic manufacturers who have to compete fiercely with imports from ASEAN, now bearing a zero percent tariff. The high production cost in Vietnam, 15-20 percent higher than in Thailand and Indonesia, makes domestically assembled products less competitive than imports.

From early 2021, when the preferential registration tax rate will no longer be valid, domestically assembled products will be at a disadvantage in comparison with imports.

The automobile market is predicted to grow by 10 percent this year. 

Tran Thuy

Car dealers sprint in last months of year, car prices plummet

Car dealers sprint in last months of year, car prices plummet

A number of large manufacturers slashed car prices in early October, signaling a fierce race in the Vietnamese auto market.

Preferential registration tax policy expires, domestically made automobiles at a disadvantage

Preferential registration tax policy expires, domestically made automobiles at a disadvantage

From 2021, when the preferential registration tax policy is removed, domestically made cars will be at a disadvantage compared with imports.

 
 

Other News

.
Organic Tet cakes become a hit
Organic Tet cakes become a hit
BUSINESSicon  09/02/2021 

Organic banh chung (square glutinous rice cake) sold in Ho Chi Minh City for the first time for Tet (Lunar New Year) has become very popular.

Novartis honored as pioneer in digital transformation in healthcare
Novartis honored as pioneer in digital transformation in healthcare
BUSINESSicon  09/02/2021 

Novartis is the sole pharmaceutical firm among a total of 34 units that were honored for their efforts and outstanding contributions to the Digital Transformation of the Healthcare Sector in 2020, at the National Digital Transformation Congress.

The poor, as well as businesses, fall into 'black credit' trap
The poor, as well as businesses, fall into 'black credit' trap
FEATUREicon  09/02/2021 

The poor, who lack financial information and knowledge, are often hurt by black credit. But many businesspeople have also become victims.

Enacting long-term reforms for strong economic recovery
Enacting long-term reforms for strong economic recovery
BUSINESSicon  09/02/2021 

As the global economy is still mostly struggling with the health crisis, the start in 2021 is overshadowed by the hurdles of the previous year. Nevertheless, Vietnam may regain traction in economic growth.

Keeping opportunities fresh in fruit and vegetable exports
Keeping opportunities fresh in fruit and vegetable exports
BUSINESSicon  08/02/2021 

The export of Vietnamese fruit and vegetables is worth hundreds of millions of US dollars each year but is so far impeded by the lack of appropriate preservation technology.

VIETNAM BUSINESS NEWS FEBRUARY 8
VIETNAM BUSINESS NEWS FEBRUARY 8
BUSINESSicon  08/02/2021 

Flower growers look to online sales amid COVID-19 resurgence

Industrial park developers promote sustainability to attract “eagles”
Industrial park developers promote sustainability to attract “eagles”
BUSINESSicon  07/02/2021 

Vietnam has witnessed a growth in the arrival of global high-tech brands like Pegatron, Universal Scientific Industrial, Foxconn.

COVID-19 outbreak takes a toll on peach blossom sales
COVID-19 outbreak takes a toll on peach blossom sales
BUSINESSicon  08/02/2021 

As the Tet (Lunar New Year) holiday approaches people in Ha Noi flock to Quang An market in Tay Ho District to buy peach blossom trees.

Tax revenue from Google, Youtube, Facebook reaches $49.5 million in 2020
Tax revenue from Google, Youtube, Facebook reaches $49.5 million in 2020
BUSINESSicon  07/02/2021 

Tax revenues from online advertising business models of foreign organisations that do not have legal entities in Vietnam like Google, YouTube or Facebook hit VND1.14 trillion ($49.5 million) last year.

E-wallets offer online lucky money services amid virus outbreak
E-wallets offer online lucky money services amid virus outbreak
BUSINESSicon  06/02/2021 

E-wallets are gearing up to offer online lucky money services as the Tet (Lunar New Year) holiday approaches amid the third coronavirus outbreak in Vietnam.

VIETNAM BUSINESS NEWS FEBRUARY 7
VIETNAM BUSINESS NEWS FEBRUARY 7
BUSINESSicon  07/02/2021 

Vietnam rice prices hit 10-year high

Information security risks for SMEs in 2021
Information security risks for SMEs in 2021
BUSINESSicon  06/02/2021 

Not only facing difficulties caused by the Covid-19 pandemic, small and medium enterprises (SMEs) in Vietnam will also face many information safety and data security risks this year.

Desire for long-term tactics in solar power
Desire for long-term tactics in solar power
BUSINESSicon  06/02/2021 

Although Vietnam began to develop solar power plants just about three years ago, the initially achieved capacities have been outstanding. 

Logistics industry forecast to grow in 2021 on global recovery
Logistics industry forecast to grow in 2021 on global recovery
BUSINESSicon  07/02/2021 

The seaport and logistics industry was forecast to grow significantly on the prospect of global trade recovery in 2021 when the vaccine to prevent COVID-19 is administered worldwide.

Vietnam attractive to franchises, experts say
Vietnam attractive to franchises, experts say
BUSINESSicon  07/02/2021 

Vietnam will become an attractive destination for franchising businesses after the pandemic ends, experts have said.

VIETNAM BUSINESS NEWS FEBRUARY 6
VIETNAM BUSINESS NEWS FEBRUARY 6
BUSINESSicon  06/02/2021 

Exports expected to continue expanding in 2021

New bank frauds emerged as Tet nears
New bank frauds emerged as Tet nears
BUSINESSicon  05/02/2021 

Customers are urged to stay cautious against rampant scam and fraud activities ahead of Tet holidays.

Shaping the next economic decade
Shaping the next economic decade
BUSINESSicon  05/02/2021 

Vietnam is expected to further improve the domestic business and investment climate with the Party setting out the country’s new Socioeconomic Development Strategy for the next 10 years,

Car refurbishment services in high demand on pre-Tet days
Car refurbishment services in high demand on pre-Tet days
BUSINESSicon  05/02/2021 

The demand for car maintenance, cleaning and refurbishment has soared on pre-Tet days, keeping garages busy from now until the last day of the Lunar New Year.

Highest expected Tet bonus over VND1 billion, average wage down
Highest expected Tet bonus over VND1 billion, average wage down
BUSINESSicon  05/02/2021 

The highest Tet bonus workers this year is VND1.07 billion, or over $41,000. The highest pay in 2020 was VND516 million a month.

 
 
 
Leave your comment on an article

OR QUICK LOGIN