Auto market: purchasing power rises sharply

17:01' 08/04/2008 (GMT+7)
VietNamNet Bridge – The sharp increase of car purchasing power helped members of the Vietnam Automobile Manufacturers’ Association (VAMA) sell 13,091 cars in March, or 4,171 units more than in February, and even more than the previous record of 12,084 units set in January.
Truong Hai Auto was the manufacturer which saw the most robust growth rate last month with 2,192 sold units, an increase of 915 units over the previous month. Toyota, also a big name in Vietnam, sold 2,326 units, up by 862 units over the previous month.
Two other automobile joint ventures that also saw impressive growth rates in sales were Ford and GM Daewoo (Vidamco).
Though Ford Vietnam could not repeat its success of 1,000 units in late 2007, it sold 905 units in March, an increase of 369 units compared to the previous month. Meanwhile, Vidamco sold 1,314 units, up by 569 units.
Other joint ventures also recorded satisfactory, if not overwhelming, results in March.
Mekong joint venture, for example, sold 315 units in March (the figure was 131 in February), VMC 78 (38), Vinastar 466 (235), Suzuki 314 (224), Isuzu 610 (219), Honda 647 (356), and Hino 239 (181).
Mercedes Benz was the only joint venture which saw a decrease in sales in March, as it sold only 118 units, down by 18 units over February.
Like joint ventures, domestic owned manufacturers, except Vinamotor, also saw sales increase sharply last month: Vinaxuki, once again, surpassed the 1,000 unit threshold, selling 1,122 units in March (770 units in February). Vinacomin sold 48 units (21), and Samco 41 (25).
It seems that locally made cars are regaining their advantage over imports.
In the first two months of the year, the sales of locally made cars were not really satisfactory due to competitive imported cars.
At that time, when automobile joint ventures were criticised by clients and state management agencies for keeping overly high sale prices, the market of car imports was encouraged by the three decisions on cutting the import tax by the Ministry of Finance.
However, it seems that customers have turned their backs on imports since the Ministry of Finance raised the import tax on car imports from 60% to 70% in an effort to curb inflation.
Analysts, therefore, have forecast that the market of locally made cars will see further growth as the market of imported cars will be narrowed as a result of the tax increases.
The analysts add that even though the Ministry of Finance has raised the import taxes on both CBU (complete built unit) imports and car parts for local assembly, there will still be a big gap between the prices of locally assembled cars and imports.
It is because the import tax on CBUs always has direct impacts on the sale prices of cars, while the import tax on car parts only has indirect impacts on products. Moreover, the sale prices of locally made cars still depend heavily on the localisation ratio of every product.

(Source: TBKTVN)