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Vietnamese Take To Imported Cars In Droves
Apr 25, 2007

Escalating growth has become the norm in the automobile market in Vietnam with an increasing tendency among consumers to purchase imported cars.

Stunning models and irresistible prices are fuelling a market surge in imported cars for the higher earning Vietnamese in a country where local presence is restricted solely to Mercedes. 18 Vietnam Automobile Manufacturers Association members including 11 with foreign sponsors are reported to have averaged 4,500 sales in cars in the last three months. Compared to the corresponding period last year, the increase is 91 percent, according to the news publishers

Vietnamese are furiously snapping up expensive cars facilitated by the global tariff cuts benefiting World Trade Organization member nations. In the context of luxury cars, price is made insignificant by the ability to afford luxury cars that negates any urge to mull over a mere $2,000 or $3,000.

The General Statistics Office registers 3,000 imported cars in 2007 first quarter. Luxury cars accounted for 10% resulting in imported luxury cars exceeding the 87 Mercedes Vietnam car sales in that period.

Special consumption tax on imported cars has recently been brought down in Vietnam, directly affecting foreign car prices and spelling major benefits for manufacturers from the state’s protection policies. Lower special consumption taxes and relatively corporate income taxes have been their privilege for years.

But price levels of auto manufacturers in Vietnam continue to remain far too high in comparison to the same models elsewhere in the world. Therefore, affordable post tax prices for imported cars in Vietnam make sense for consumers.

According to VAMA’s statistics, MPV and SUV sales registered 2,333 units, 339 units more than the previous February. High price levels have resulted in stagnation in the SUV/MVP segment, making customers reluctant to buy cars. At the same time choices have grown in the market with imported cars.

Commercial car sales also shot up due to the need for vehicles in production and business. Additionally, this segment targets clients who are more diversified and easily satisfied.

RNCOS research analyst has come to the conclusion that the more than 8% growth rate of the Vietnamese economy for the previous years remaining constant, living standards has been more comprehensively boosted and infrastructure dramatically changed. The implication for Vietnamese automobile manufacturers is therefore optimistic.

Related Market Research Reports:
Vietnam Automobile Industry Forecast (2007-2010)
Asian Automotive Industry Outlook (2007-2011)
Global Hybrid Car Market Forecast to 2010