Imported CBU (completely built unit) cars are expected to flood Vietnam, as domestic automobile manufacturers prepare to launch new models.

Foreign-invested auto companies in Vietnam are stopping domestic production and shifting to importing cars to sell in the market.

VietNamNet Bridge - The Vietnamese automobile market is expected to have an unpredictable year following an unsatisfactory 2017.

Foreign-invested auto enterprises in Vietnam have canceled orders for imports from Thailand and Indonesia because they still cannot get certificates from agencies of export countries, as required by Decree 116.

Car imports to Vietnam have dropped sharply in anticipation of Decree 116 which sets strict regulations for locally assembled automobile businesses as well as importers.

VietNamNet Bridge - Vietnamese enterprises made hefty investments in automobile manufacturing projects in 2017, with the aim of becoming an automobile production center in SE Asia.

VietNamNet Bridge - On January 1, 2018, the luxury tax on some car models with small cylinder capacity was reduced and the import tariff on ASEAN sourced cars was cut to zero percent.

Vietnam once put high hopes on automobile joint ventures, believing that foreign technologies would help develop the automobile industry. However, it now believes that it would be better not to rely on outsiders.

Car dealers and buyers are ‘holding their breath’ before January 1, 2018, when car prices are expected to see big fluctuations.

Russian automobile manufacturers (KAMAZ, GAZ, and UAZ, among others) will collaborate with Vietnamese partners to establish joint ventures to manufacture and assemble automobiles and trucks.

Vietnam will have to cut the tariff on CBU imports from ASEAN from 30 percent to zero percent in 1.5 months, but state management agencies and manufacturers are still arguing about the import tariff on car parts.

VietNamNet Bridge - While car imports are likely to be barred from Vietnam by technical barriers, domestic automobile manufacturers have been given preferential treatment. 

VietNamNet Bridge - Ministries have been proposing many solutions to develop the automobile industry, but no official decision has been made.

VAMA cited difficulties of the Vietnam industry – the small market, small output and high production costs, which all make it more costly to manufacture car parts in Vietnam.

VietNamNet Bridge - Despite the failure of the national automobile industry development plan, Vietnamese companies have never given up the dream of making cars.

Analysts believe that new car brands will enter the Vietnamese market after 2018 when import tariffs fall, providing products at low prices and targeting middle-income earners. 

VietNamNet Bridge - Increasing the localization ratio in industrial products and becoming more involved in the global production and supply chain are the top concerns of Vietnamese enterprises.

The truck market is struggling as the demand for Chinese products has dropped dramatically, while car buyers have canceled their purchase plans and will not return until 2018 when import tariff cuts take effect, making vehicles cheaper.

VietNamNet Bridge - Taking every opportunity to reduce prices, Truong Hai and Toyota, the two big automobile manufacturers, are trying to capture every corner of the market.

While MOIT and experts have decided that Vietnam needs to develop an automobile industry of its own, other experts believe that the ‘automobile dream’ is ‘far away’ and that Vietnam should focus on making 2-wheel vehicles.