Arrow Consulting / T&D Co.
Premier Provider of Consulting Services in Vietnam
Home About us Services Industry Overview News & Data Archive Contact Us
Industry Overview
Civil Engineering
Real Estate
Retail
Consumer Goods
E-Commerce
International Trade
Media & Marketing
Automotive Industry
Textile & Garment
Power Sector
Information Technology
Home / Industry Overview / Automotive Industry

Vietnam’s vehicle market is known for its exorbitant price, of new as well as used vehicles. In no other parts of the world, a new Toyota Camry 3.5 can not be bought for less than US$69,000. A 5-year old Mazda 626 can still be sold for US$19,000. There is a presence of following international car brands in Vietnam, through the co-operation form of joint venture with a local partner (the remaining demand is met through local production of commercial vehicles (Vinaxuki, Truong Hai etc.) and import, on which also high tax rates are imposed):

Toyota, Honda, Ford, General Motors (overtaking from Daewoo), Suzuki, Mitsubishi, Fiat,
Mercedes Benz, BMW, Mazda, Kia, Isuzu, Ssangyong, Hino (Hyundai truck)

The government's strategy was to have the joint ventures to look beyond simply assembling cars from imported parts and increase the ratio of locally made parts, which requires investment in auto-parts manufacturing.

Since the automobile industry depends enormously on economy of scale, it is difficult to achieve in such a limited market as Vietnam’s, difficult for the auto-part manufacturers as well as for the car makers. The optimal size for a single plant is said to be over 200,000 units per year. The total consumption of joint-venture made cars is around 60,000.

In addition, the lack of spare parts manufacturers in Vietnam means the joint ventures have to rely on importing almost all parts for assembling cars resulting in higher prices. New projects on assembling and manufacturing four seat cars won’t be granted licences. However, projects specialising in assembling and manufacturing specialised vehicles such as trucks, vans and buses, and those specialising in manufacturing spare parts, will be facilitated and encouraged.

Motorbikes: Vietnam among the world's most important market

At the contrary, the motorbike market is one of the most promising all over the world. Japanese manufacturers: Honda and Yamaha (Suzuki in backward trend in recent years) seemed to gain upper hand agains Chinese import and manufactured bikes, which dominated the span 1999-2003. Honda Vietnam itself declared Vietnam, together with Brazil and India as its strategic market.

Stylish scooters such as Piaggio and several Honda import brands, which cost up to US$6,000 also had record sales in 2006 and 2007. One must merely come to Vietnam's big cities Hochiminh City, Hanoi and cross the streets to recognize the potential of the market, which recently also caught Harley Davidson's interest in putting up projects in Vietnam.

Arrow Consulting's expertise 

Our team can look back at their year-long experience while working with most reputable car and motorbike manufacturers in Vietnam: Honda, Ford, Toyota, Fiat, Ssangyong, Vinaxuki etc. Our expertise along with extensive connections will be the assets to serve clients who look for opportunities in Vietnam's vehicle market.

 

Copyright T&D Co., Ltd., . All Right Reserved. General Enquiries info@arrowconsulting.com.vn