Car importers switch to ASEAN for imports

Automakers in Vietnam are now rushing to import cars from ASEAN member countries as import tariffs on automobiles have just been slashed to 70 percent from the previous 82 percent rate.

Kim Thanh, a Honda distributor, will hand over two 2011 five-seat 3.5-liter Honda Accord cars to its first customers at an after-tax price of VND1.66 billion (US$85,000) in mid-January. Both of the vehicles have just been imported from Thailand by Honda Vietnam (HVN).

Another Accord model running on a 2.4-liter engine that has often been purchased from Taiwan will also be imported from Thailand for Vietnam’s market consumption, Gan Kok Seng, deputy CEO of HVN, said.

Honda products like Civic or CR-V assembled in Vietnam are usually of an older version than those in other markets while the Thai Accord is an up-to-date version, according to HVN.

Toyota Motor Vietnam (TMV) is also set to import its five-seat Yaris model from Thailand.

To compete with a similar version available in Vietnam which was earlier imported from Dubai, TMV will bring in cars with bigger cylinders and offer a more competitive price, TMV said.

In 2011, Ford Vietnam (FVN) will import three versions of the five-seat Fiesta made in a $500 million plant set up in Thailand’s Rayong Province, a representative from the automaker has confirmed.

Many distributors have received orders for the model whose popularity has been confirmed by its sales figures in other markets so far.

Prior to the current shift to importing cars from Thailand, some members of the Vietnam Automobile Manufacturers Association, such as FVN, VinaStar, and TMV, already imported pickups produced in Thailand like Ford Ranger, Mitsubishi Triton, Isuzu D-Max and Toyota Hilux.

More competitive prices

Car makers like HVN, TMV, and FVN all have plants in other ASEAN countries that are many times the size of their production facilities in Vietnam.

Their production costs are very competitive thanks to their close proximity to the surrounding businesses that provide car parts and accessories.

As a result, not only do joint venture businesses like the three mentioned automakers hurry to import the four-wheel vehicles from ASEAN countries but Vietnamese importers also join the race.

T., an owner of a Ho Chi Minh City-based car import company, said cars for the middle-range market have traditionally been imported from the Middle East and South Korea.

However, his company and other businesses now switch to Indonesia and Thailand for imports like Innova, Ford Fiesta, Toyota Hilux, and Toyota Fortuner, he added.

It is more competitive to import cars at a 70 percent tariff rate, he explained. If a Ford Fiesta is priced at $15,000 in Thailand, it will cost $31,000 in Vietnam, which is equivalent to the price of locally assembled vehicles.

It would otherwise cost $45,000 if the former tax rate was applied, he remarked.- Tuoi Tre

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