Total car sales in Vietnam in 2013 reached over 110,500 vehicles, a 19% year-on-year increase, according to the Vietnam Automobile Manufacturers' Association (VAMA).

In particular, the passenger car segment with 4- to 10-seat vehicles increased by 25% year on year, while the segment of truck and commercial vehicles increased by 16% over 2012.

This is unexpected growth as many industrial insiders and experts had forecast a 10% year-on-year increase given the fact that the market had appeared gloomy for many months. There were times the whole industry’s sales unexpectedly declined, though an upward trend over the previous year is expected, said VAMA.

But December sales helped save the day for the industry with 13,205 vehicles of all types sold, increasing 30% compared to November and up 32% compared to the same period in 2012, according to VAMA.

Since then, VAMA has predicted that total car purchases in 2014 will reach about 120,000 units, representing a growth of 9% compared with 2013.

Other side of the coin

However, sales results have painted a new picture for the local automobile industry, as the market witnessed great strides of completely built units (CBU), better known as imported cars.

According to the General Statistics Office, the total amount of CBUs in 2013 was estimated at 34,500 units worth $709 million, up 25.9% in volume and 15.2% in value from 2012.

The amount of cars imported in the last month of 2013 is estimated at 3,000 units and $65 million, on par with both volume and value turnover compared to the previous month.

When CBU car imports increased, the growth of domestically assembled cars, or completely knocked-down cars, were clearly inferior.

Specifically, the total sales of VAMA business volume in 2013 reached 96,692 units, up 20% compared with 2012 and reaching 2013’s plan of 100,000 vehicles. Many VAMA members, such as Mercedes - Benz, Truong Hai, Ford, Honda, Toyota and Suzuki, are importing more and more CBUs.

Within a year, several auto brands have officially entered the Vietnam market such as Rolls - Royce, Bentley, Lexus, Infiniti, Range Rover, and MG Cars.

Because of the increase in imported cars, more imported models were introduced than ever at the Vietnam Motor Show in October 2013, and many of the most expensive models were sold at the event.

Given that fact, by the time the import tariffs of CBUs from ASEAN countries and other parts of the world decrease to 0% by 2015 and 2018 respectively, the imminent collapse of the domestic car manufacturing industry becomes more apparent than ever.