Imported cars are parked at the Hiệp Phước Container Port in HCM City. — Photo

Strong fluctuations in exchange rates have already caused problems for many industries recently, including the automobile sector.

When exchange rates increase, the cost of importing cars from foreign markets such as Japan, South Korea, the US and Europe also rises.

Importers have to pay more to buy cars and this cost is often passed onto consumers.

The listed prices of many Kia models such as Sonet, Carnival, Carens have risen by VNĐ5 - 20 million (US$205-$815) since the beginning of May.

Prices of Mazda's Mazda2, Mazda3, CX-3, CX-30, and CX-8 cars have also increased by VNĐ5-10 million each, depending on the model.

Before the exchange rate soared, a number of automobile companies had already increased prices but for many other reasons.

Firms explained away some cost increases due to rising prices of input components, affecting production costs.

The increase in imported car prices also creates competitive pressure for domestic automakers. Although domestically-produced vehicles are not directly affected by exchange rates, the price of imported raw materials to produce vehicles has also gone up, causing production costs to increase.

“With appropriate measures and timely adjustments, these negative impacts can be minimised, bringing stability and sustainable development to the Vietnamese automobile market, " said an auto industry expert to Kinh Doanh (VnBusiness) online magazine. "The Government and businesses need to co-ordinate closely to find effective solutions, helping the auto industry overcome difficulties and develop strongly in the future." — VNS