Three-way auto market showdown in Vietnam

VietNamNet – Car buyers now have more than one choice open to them. They can choose between cheap Chinese imports, used imports, or new locally made vehicles.
VietNamNet – Car buyers now have more than one choice open to them. They can choose between cheap Chinese imports, used imports, or new locally made vehicles.



Analysts believe that the automotive market will develop a three way battle between producers and importers in the near future.



The Chinese-made Lifan 520, with its glossy appearance, gained a great deal of consumer confidence at Autotech 2006, an automotive trade fair. The first Lifan 520s are expected to be available in Vietnam this August.



Meanwhile, the Chinese Gonow Jetstar – an SUV assembled and distributed by Truong Thanh Company, priced at $19,500/unit, could also prove a good choice for car buyers, who prefer SUV models, but cannot always afford an Escape, BMW X5 or Mercedes M-Class. The Chinese model is therefore expected to compete very well against locally produced models like the Terios and Vitara, which price at over $20,000.



Previously, Vietnam’s automotive market was controlled by Vietnam Automobile Manufacturers Association (VAMA) members. Prices offered by manufacturers were always far higher than those in the international market. A car priced at $20,000 in a European country, would cost nearly $40,000 in Vietnam. This has led Vietnamese customers to expect that the appearance of Chinese models will be a hard slap in the face of local manufacturers.



They also expect the inflow of used imports to create more market option for buyers. Used cars are still very expensive, but market analysts believe that they will still sell. A BMW X5, for example, has a post-tax sticker price of $70,000, and is still considered better than a Land Cruiser assembled by a local manufacturer.




In general, used imports will sell to high income earners only, while VAMA and Chinese manufacturers will struggle to sell cars to the middle-class. It is unclear now, who will claim top stakes in the market, as the quality of the cheap Chinese cars remains unknown.



(Source: TBKTVN)