VietNamNet Bridge – While keeping complaining about the small scale of the Vietnamese market and the changeable policies, foreign automobile manufacturers still have been flocking to Vietnam.
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Betting on the future
Analysts have forecast that about 100,000 cars would be sold in 2013, a modest
figure for more than 10 big automobile manufacturers in Vietnam.
However, the manufacturers believe that Vietnam’s market would be bigger after
2020, when Vietnam’s income per capita reaches $3,000 per annum. It’s now the
right time for automobile manufacturers to join the market and prepare for the
market boom in some more years.
French Peugeot Citroen, for example, has cooperated with Vietnamese Truong Hai
to assemble and distribute Peugeot brand products. Rolls-Royce has also found
the distributor in Vietnam and it is going to introduce the first authorized
agent. Lexus would make its official presence in Vietnam by the end of 2013.
Mazda, after leaving Vietnam in 2012, has returned to set up a factory and
import products for domestic sale.
Boosting sales proves to be not the most important goal for the new comers. They
would pay more attention to the branding, developing the post-sale services and
do everything they can to prepare for the boom.
The automobile manufacturers, though putting a high hope on the enlargement of
the Vietnamese market, have said they are not sure if they would set up
production bases in Vietnam.
The marketing director of a new automobile group said that the group’s
leadership is still waiting and seeing how the policies would be. In case the
policies do not facilitate the production, the manufacturer would merely import
cars to Vietnam for domestic sale.
Preparing themselves for the new period
The biggest automobile manufacturers in Vietnam have been making hectic
preparations for the new development stage which would come in 2018, when the
import tariff on the imports from AFTA zone decreases to zero percent.
They would not make the car models with low sales in Vietnam, but would simply
import the products for domestic consumption. They would only focus on making
some 1-2 car models with high output, while pushing up the localization process
to cut down the production costs and become competitive with import models.
However, the automobile manufacturers also said nothing special has been made
yet until they can see the policies to be laid down by the government of
Vietnam. Their production plans would fail completely with the unfavorable
policies which make it unable for them to compete with the imports.
Incentives would be given to domestically assembled cars
The Ministry of Industry and Trade is nearly completing the drafting of the
industry development strategy by 2020 to be submitted to the government.
The ministry believes that the current tax rates are overly high, which makes
the market not big enough to encourage automobile manufacturers to localize
their production.
Therefore, it has suggested three scenarios of tax reductions.
With the first scenario, Vietnam would cut 30 percent of the luxury tax and the
vehicle registration ownership tax rate on the cars with the cylinder capacity
of less than 2.0L.
The ministry has suggested the 50 percent tax reduction for the second option,
and the 70 percent tax rate reduction for the strategic car line in the third
scenario.
The second one is the most favored by the industry.
Tran Thuy