Vietnamese consumers who have found that they can now afford a car have begun to save money for their dream, according to recent figures on car sales and imports.
Vietnam’s biggest auto show this year, which concluded in Ho Chi Minh City on November 1, saw the highest-ever number of deals reached, while the total value of imported cars sold in the first ten months of 2015 surpassed what Vietnamese buyers spent for the entirety of last year.
The Vietnam Motor Show 2015 wrapped up with orders for 2,500 cars from 18 automobile brands, the biggest number ever recorded in 11 years of the event held by the local industry, according to the organizers.
At this exhibition last year, just over 560 car sale contracts were signed, the organizers added.
But they did not disclose the car sales of each automobile brand.
Vietnamese car manufacturer Truong Hai Auto (Thaco), which is currently assembling and distributing cars for three brands, Kia, Mazda and Peugeot, said it had secured 1,250 orders, according toThe Saigon Times Online.
In particular, the South Korean brand Kia took the lead with 600 orders, followed by Japanese Mazda and French Peugeot with 550 orders and 100 orders, respectively, the news site said.
Mercedes-Benz Vietnam did not reveal the specific number of orders the company had signed during the exhibition, but said the number of contracts it signed rose 20 percent compared to the 200 orders of last year, The Saigon Times Online reported.
The Vietnam Motor Show 2015 introduced more than 150 models and attracted over 178,000 visitors, the largest number so far.
Two weeks before the Vietnam Motor Show in Ho Chi Minh City, the Vietnam International Motor Show, dedicated to imported cars, took place in Hanoi with 50 vehicles from nine car brands showcased to 70,000 visitors with more than 170 car sale contracts inked.
The sales of locally-assembled cars and imported autos are also on the rise, according to official figures.
According to the General Statistics Office of Vietnam, the number of imported automobiles in October reached 11,000 units, worth US$203 million, up 28.2 percent in quantity and six percent in value compared with the previous month.
The October figures brought the total number of imported cars in the first ten months of 2015 to about 95,000 vehicles with a value of over $2.31 billion, up 82.8 percent in volume and 100.2 percent in value compared to the same period last year.
The total import turnover in the first 10 months exceeded the revenue of both 2013 and 2014 combined, at $1.57 billion and $709 million, respectively, according to the statistics office.
The last quarter of the year is often the period of time when there is high demand for new cars so insiders said car imports may surpass 100,000 units worth over $2.5 billion by the end of this month, The Saigon Times Online reported.
The Vietnam Automobile Manufacturers’ Association (VAMA) said by the end of September, sales of imported cars had risen 57 percent, comparable to that of locally-assembled vehicles which soared 52 percent over the same period last year.
Experts and analysts have said that with the reduction of duties on imported automobiles following the effectiveness of multiple regional and international free trade agreements, accompanied by cheaper fuel prices, car imports will continue to boom in the near future.
The VAMA forecast that with the average number of car imports ranging from 10,000 to 11,000 vehicles per month, the total volume may top 115,000-117,000 units in 2015.
Government’s latest warning
The year 2018 is the turning point for Vietnam’s automobile industry as duties on cars imported from the Association of Southeast Asian Nations will be fully removed, the government said in a new decision aimed at giving a real boost to the sector.
Vietnam has only three years left to prepare and strengthen the competitiveness of its automotive industry, according to Decision 1829/QD-TTg on the action plan for the development of the automotive and automotive parts industry.
The decision, signed by Prime Minister Nguyen Tan Dung on October 28, is to follow the national industrialization strategy within the framework of the Vietnam-Japan cooperation program for 2020, with a vision toward 2030.
If the country cannot seize this opportunity, Vietnam will fall into the same situation the Philippines faced a few years ago, the government warned in the decision.
With an underdeveloped automotive industry and unclear development policy, car producers in the Philippines stopped assembling and began to import automobiles when the demand for cars started to pick up, causing a serious trade deficit in the country back then, according to the decision.