Vietnamese automobile manufacturing, assembly, and trading enterprises are in trouble due to a dearth of part imports from China, posing a high risk of delaying automobile deliveries to customers and rising prices.

The transport of automobile part imports from China has improved with obstacles being removed gradually, but local firms are concerned over the accessory supply chain disruption.

The general director of a local truck assembly company told Tuoi Tre (Youth) newspaper that most of the company’s parts are imported from China.

Instead of being excited about a new agreement to supply thousands of cars to its partner, the company is now anxious about the supply chain disruption as some factories in China are operating perfunctorily given the power shortage, including its partner manufacturing automobile parts.

Therefore, the general director is concerned over his company’s manufacturing and assembly process and the possible price hikes of products.

The power outage in Sichuan Province’s Chengdu City in China amid a heatwave has forced those using industrial electricity to downsize their production to ensure sufficient power for local residents.

Automobile part manufacturers face the same fate. 

Apple supplier Foxconn’s iPad factory in Chengdu was closed down for six days due to the power crunch, which may affect the new product launch.

After the semiconductor chip crisis, automakers are bracing for a possible glass shortage. Russia’s shutdown of gas pipelines to Europe will seriously affect the automobile sector.

“Russia’s shut-off of gas to Germany would cause a new parts shortage crisis,” Silja Pieh, head of strategy at luxury carmaker Audi AG, said, citing glass as a prime example. 

Glass is often used to produce car windows. Automobile firms which cannot produce windows themselves will have to import this part from other countries.

In the chip crisis, many automakers replaced some chips with others to avoid the late automobile handover but it will be harder to find alternatives to glass parts.

Car prices up

Many automobile enterprises in Vietnam have revised the prices of automobile models beginning September.

In particular, the prices of Peugeot and KIA cars have increased since September 1. Peugeot 3008 Active saw its price rise by VND20-40 million (US$852-1,705) to VND1.1-1.2 billion ($46,898-51,161) apiece.

Meanwhile, the Allure and GT versions of Peugeot 5008 are now sold at VND1.3 billion ($55,425) and VND1.4 billion ($59,688), respectively, an increase of VND40 million ($1,705).

The prices of KIA Morning, K3, K5, Sorento, and Carnival models manufactured and assembled in Vietnam by Truong Hai Auto Corporation have risen by VND5-40 million.

KIA Morning automobiles now cost VND389-449 million ($16,548-19,143) each, up VND10-15 million ($426-639), depending on the version.

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