In Vietnam, the rise in economic growth is being reflected in an increase in the number of vehicle sales in the country as the population discards the traditional mopeds for cars.
AFP news reported Vietnam’s Automobile Association disclosing on September 29, 2007 an 80% upsurge in automobile sales in the initial eight months of the year 2007, with 156% hike in passenger cars leading the increase.
During the period from January 2007 to the end of August 2007, 16 out of the 18 members of the VAMA (Vietnam Automobile Manufacturers’ Association) sold 41,557 vehicles in comparison to 23,066 in 2006. VAMA also revealed a 73% year-on-year hike in car sales with 6,559 units compared to the corresponding month the previous year.
Also, for 11 foreign-backed firms, auto sales in Vietnam shot up 64% in August from last year to 4,936 vehicles. The Association revealed that Toyota had sold 1,796 automobiles accounting for 36% of total sales reported by foreign car manufacturers last month and an increase of 30% from 2006.
Passenger cars topped the sales chart with a 156% increase to 9,320 vehicles. The reason for the rise is the rising middle class gaining from the country’s annual economic growth of over 8% are choosing cars over mopeds.
Moreover, as almost all the manufacturers are giving discounts on their brands, Vietnam’s automobile market got added momentum. Marketers identify Australia, US and China as the most potential markets. Vietnam’s market is believed to be under the sway of Chinese second-hand cars, mainly on account of the affordability, despite the safety standards being questioned by many.
On the basis of growing population (which is currently exceeding 84 Million), the booming economic growth, and low penetration of cars, industry experts believe that the automobile demand will remain promising in future in the country.
A research analyst at RNCOS describes the situation in terms of growing number of cars, buses and trucks steering their way through the two-wheeler traffic, fuelled by escalating incomes and better roads in Vietnam. Luxury vehicle sales have undergone a dramatic surge as well. He says, “Considering the fact that Vietnam still has a sizeable population making their living on small farms, it is rather impressive”.
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