112,000 cars sold in 2010, down 6%

Sales of automobiles manufactured or assembled in Vietnam fell 6 percent last year to 112,224 units, the Vietnam Automobile Manufacturers Association said.

It included 53,100 complete built units (CBUs) that were imported at a cost of US$960 million, a fall of 34.1 percent, according to the General Statistics Office.

In December, usually the peak business month according to the auto industry since many people buy cars for traveling during the year-end holidays, sales were down 17 percent at just 12,500 units.

Of that, sales of sedan cars fell the most, by 21 percent, sales of multi-purpose vehicles fell by 19 percent and sales of commercial vehicles fell the least, by 13 percent over the same period of 2009.

Most VAMA members reported decline of sales.

Even Ford Vietnam, which has announced December 2010 was the best sales month of the year, sold over 6,370 cars in 2010, down by 22 percent compared to 2009.

GM Daewoo sold nearly 9,700 cars in 2010, still 32 percent less than 2009. Similar to GM Daewoo, VinaStar (Mitsubishi) sold nearly 2,500 cars in 2010, while Honda Vietnam sold over 3,100 cars, down by 26 percent.

However, Toyota Vietnam, leader of the market in 2010, had growth rate of three percent compared to 2009, reaching 31,135 cars, accounting for 27.7 percent of total sales of VAMA.

Truong Hai followed with over 26,000 cars sold, up by 20 percent of the same period of 2009, accounting for 23.2 percent of the total sales of VAMA.

Industry insiders admitted that last year was more difficult than 2009 for the domestic auto market because of lingering effects of the global economic crisis.

Assessing the market in 2011, most car assemblers in the country said the situation would continue to be difficult, since the economic situation remains difficult, US dollar exchange rate remains high against dong, and lending rates of banks are still very high.

However, they expected this year to see improvements thanks to a new regulation to shave tariffs on vehicles imported from ASEAN countries, effective January 1.

Under the new tariff, vehicles with fewer than nine seats and an engine capacity of 1.8-2.5 liters would see import taxes lowered by 1 percent to 82 percent, while rates for vehicles with larger engines would drop by 6 percent to 77 percent.

Accordingly, vehicles with a cylinder size of less than 2.0 liters would enjoy a reduction of roughly 0.8 percent against the current price. The reductions for vehicles with cylinders of 2.0–3.0 liters would be 0.9 percent. For cars with cylinders of 3.0 liters or more, the savings would be roughly 4.4 percent.

Auto market gets into gear

The local auto market is ready to roll this year with a number of new brand models being launched.

Honda Vietnam (HVN) is revved up after unveiling a new sedan model, the Honda Accord 2011, imported in a completely built unit (CBU) form, which is expected to diversify the market for local consumers, alongside existing models such as Toyota Camry (assembled in Vietnam) or the CBU-imported Hyundai Sonata and Nissan Teana.

The new 3.5L engine Honda sedans are being sold for VND1.66 billion ($83,000), around VND200 million ($10,000) more than 3.5Q Camry vehicles.

Toyota Vietnam (TMV) will soon enter the market with a new version of the multi-purpose vehicle Toyota Innova. TMV sold out around 7,300 Innova vehicles in 2010.

Ford Vietnam, the US-backed auto firm, is also expected to launch its Fiesta model in the second quarter of this year, a move which will boost the Ford brand’s appeal on the Vietnamese market.

The Fiesta would have to compete with the Toyota Yaris to seize the market share after this Japan-backed auto firm unveiled plans to sell this model in Vietnam in 2011 (formerly the model was imported and sold by commercial firms but not by Toyota Vietnam). The Toyota model’s launch may coincide with the launch of Ford Vietnam’s Fiesta model.

According to industry experts, the market for locally assembled vehicles will be volatile in 2011 in light of financial management changes. The duty imposed on imported vehicles from the Association of South East Asian Nations (ASEAN) member countries was eased to 70 per cent from the previous level of 83 per cent while the Vietnam dong-US dollar rate is still high and registration fees are slated to rise from 12 to 20 per cent.

Sales by Vietnam Automobile Manufacturers’ Association (VAMA) members were down six per cent in 2010 against 2009 with commercial vehicles losing four per cent, sedans and hatchbacks three per cent and multi-purpose vehicles 13 per cent. However, sales in December topped 2010 with 12,485 units being sold in this month alone.

Tags: Vietnam automotive, Vietnam automotive industry, Vietnam autos market, Vietnam car sales