CBU (complete built unit) imports from Thailand account for more than 50 percent of total car imports and turnover in the first eight months of the year, according to the General Department of Customs (GDC).
GDC reported that by the end of August, Vietnam had spent $2.136 billion, or VND50 trillion to import 95,929 cars of different kinds, of which imports from Thailand accounted for 50 percent. At least 56,792 products were imported from the country, worth $1.1 billion.
In August 2019 alone, 4,266 cars were from Thailand, out of 9,412 cars imported.
Vietnam is becoming a big car import market of Thailand. If this continues, the total import value from Thailand will be $1.5 billion with 80,000 cars to be imported in 2019.
The average import price of imports from Thailand is $19,369, or VND450 million, which doesn’t include taxes and fees. However, car dealers predicted that the import price would decrease to below VND400 million because the Thai market is getting saturated. As car output is increasing rapidly, the Thai government is applying policies to encourage exports.
|Car dealers predicted that the import price would decrease to below VND400 million because the Thai market is getting saturated. As car output is increasing rapidly, the Thai government is applying policies to encourage exports.|
According to the Federation of Thai Industries, the automobile industry will produce 2.15 million cars this year, of which 1.05 million cars will be sold domestically and the remaining exported. Meanwhile, Thai exports to Europe are facing problems, so the exports will mostly target the Asian market.
Vietnam is a market with great potential in Southeast Asia, expected to have 1 million products a year after 2025. Vietnam is near Thailand in geographical position, while the tariff barrier has been removed.
Analysts say that Thailand has a developed automobile industry, called the Detroit in Asia, with high localization ratio. Thai product quality meets international standards and the autos can be exported to the US, EU and Australia. In Vietnamese thoughts, Thai cars are better than Indonesian.
With big output and competitive price, Thai products will be a threat to Vietnamese ones.
According to Le Ngoc Duc, general director of TC Motor, if Thailand turns on the green light, automobile manufacturers will slash the price of car exports to Vietnam for a certain period. If so, Vietnamese automobile manufacturers will face problems.
Truong Hai Automobile has spent VND450 million to increase Kia factory’s capacity from 20,000 to 50,000 products a year. The manufacturer now has a Mazda factory (50,000 products a year) a Kia factory (50,000) and a Peugeot factory (20,000).
TC Motor has a sedan assembling factory, with 50,000 products a year. The biggest manufacturer is Vingroup, which is running Vinfast factory, with the capacity of 250,000 products in the first phase of operation.
HCMC has approved a plan to raise registration fees for new automobiles and motorbikes to the highest level, with the fee for under-nine-seat cars being raised to VND20 million from VND11 million.
The Ministry of Industry and Trade is expected to submit to the Government an automobile industry development plan with solutions to supporting auto manufacturing projects in Vietnam.