Vietnam Autos Report Q1 2012
Includes 3 FREE quarterly updates
New vehicle sales in Vietnam have risen by 2% year on year (y-o-y) over the first eight months of 2011 to reach 70,650 units, according to data from the Vietnam Automobile Manufacturers Association (VAMA). This figure includes both domestically produced vehicles plus those imported into the country by VAMA members. On the import side, the number of completely built units (CBUs) imported into the country over the Jan-Aug period rose by 30% y-o-y to reach 42,000, according to a September 2011 report on the AutomotiveWorld website. The value of imported cars increased by 32% y-o-y to US$782mn. This comes despite efforts by the government to curb imports in favour of developing the domestic industry.
Looking at the monthly data, new vehicles sales reached 9,518 units in August 2011, up 9.8% y-o-y, compared with 8,671 units in August 2010, according to the VAMA. During the same month, passenger car sales increased by 54% y-o-y to 4,201 units, which helped to overturn a negative month-on-month (mo- m) trend from the past several months. Commercial vehicle sales were down 24% y-o-y to 3,164 units in August.
There has been something of a slowdown in the monthly growth rate in sales figures for the entire new vehicle sector. As of May 2011, new vehicle sales were up by 11% y-o-y. By August, they slowed to 2% y-o-y. Against this backdrop, BMI is happy to maintain its 2011 new vehicle sales forecast of 118,824 units for now, but we caution that there may be slight downside risks to this forecast should the downward trend in m-o-m sales resume.
The country is still dogged by high inflation, with the CPI at 18% as of September 2011, and a weak currency, which may act as a demand suppressant over the rest of the year. Moreover, the car industry remains heavily taxed, with taxes reportedly accounting for some 60% of the value of a new car in Vietnam at present. One glimmer of hope for the autos industry was a report in the Vietnam Investment Review magazine during August 2011 that the Ministry of Finance is considering plans to revise the special consumption tax levied on vehicles, a move which may see certain types of vehicles exempted from taxation in the future. No concrete proposals had been tabled as this report was being compiled in October 2011.
Among local producers, the leading domestic automaker remains Truong Hai Auto Joint Stock Co (Thaco), which sold 2,677 cars in September. The company has sold a total of 23,413 cars over the Jan- Sep 2011 period, with a market share of almost 29% of new vehicle sales year-to-date. In second place is Toyota Vietnam, which has sold 22,106 vehicles year-to-date, with a market share of 27.4% In May 2011, the Vietnam Today website reported that the head of Thaco, Tran Ba Duong, stated that constant changes to domestic tax policy continue to cause problems for local automakers. As part of discussions with Deputy Prime Minister Hoang Trung Hai, Tran called for consistency in tax levels, which would allow carmakers to invest for the future and prepare for the onset of competition following the slashing of import tariffs to zero by 2018. Tran also called for further government support to help develop the burgeoning local spare parts industry.
For his part, Deputy PM Hoang praised Thaco’s recent work and also said that the government would be looking favourably on Quang Nam province’s proposal to develop a new autos manufacturing centre within the Chu Lai open economic zone.
Name change for Vidamco In September 2011, General Motors Company (GM) announced that it would be changing the name of its Vietnamese operation from Vidamco to GM Vietnam. At the same time, the company announced that it would now be selling all of its cars under the Chevrolet brand, with production and sales of Daewoo branded cars to stop immediately. The company will continue to provide after-sales care and spare parts for owners of Daewoo cars.
GM Vietnam plans to launch three new Chevrolet models in Vietnam before the end of the year and to upgrade its dealer network and service centres. According to the company, Chevrolet sales were up by 40% over the first eight months of the year.
As of September 2011, GM Vietnam had sold 7,353 CBUs year-to-date with a market share of 9.1%. This puts the company in third place in the Vietnamese market, behind Thaco and Toyota Vietnam. The company’s best-selling model is currently the compact Cruze, which has sold 2,009 CBUs in the year to September 2011.
New vehicle sales in Vietnam have risen by 2% year on year (y-o-y) over the first eight months of 2011 to reach 70,650 units, according to data from the Vietnam Automobile Manufacturers Association (VAMA). This figure includes both domestically produced vehicles plus those imported into the country by VAMA members. On the import side, the number of completely built units (CBUs) imported into the country over the Jan-Aug period rose by 30% y-o-y to reach 42,000, according to a September 2011 report on the AutomotiveWorld website. The value of imported cars increased by 32% y-o-y to US$782mn. This comes despite efforts by the government to curb imports in favour of developing the domestic industry.
Looking at the monthly data, new vehicles sales reached 9,518 units in August 2011, up 9.8% y-o-y, compared with 8,671 units in August 2010, according to the VAMA. During the same month, passenger car sales increased by 54% y-o-y to 4,201 units, which helped to overturn a negative month-on-month (mo- m) trend from the past several months. Commercial vehicle sales were down 24% y-o-y to 3,164 units in August.
There has been something of a slowdown in the monthly growth rate in sales figures for the entire new vehicle sector. As of May 2011, new vehicle sales were up by 11% y-o-y. By August, they slowed to 2% y-o-y. Against this backdrop, BMI is happy to maintain its 2011 new vehicle sales forecast of 118,824 units for now, but we caution that there may be slight downside risks to this forecast should the downward trend in m-o-m sales resume.
The country is still dogged by high inflation, with the CPI at 18% as of September 2011, and a weak currency, which may act as a demand suppressant over the rest of the year. Moreover, the car industry remains heavily taxed, with taxes reportedly accounting for some 60% of the value of a new car in Vietnam at present. One glimmer of hope for the autos industry was a report in the Vietnam Investment Review magazine during August 2011 that the Ministry of Finance is considering plans to revise the special consumption tax levied on vehicles, a move which may see certain types of vehicles exempted from taxation in the future. No concrete proposals had been tabled as this report was being compiled in October 2011.
Among local producers, the leading domestic automaker remains Truong Hai Auto Joint Stock Co (Thaco), which sold 2,677 cars in September. The company has sold a total of 23,413 cars over the Jan- Sep 2011 period, with a market share of almost 29% of new vehicle sales year-to-date. In second place is Toyota Vietnam, which has sold 22,106 vehicles year-to-date, with a market share of 27.4% In May 2011, the Vietnam Today website reported that the head of Thaco, Tran Ba Duong, stated that constant changes to domestic tax policy continue to cause problems for local automakers. As part of discussions with Deputy Prime Minister Hoang Trung Hai, Tran called for consistency in tax levels, which would allow carmakers to invest for the future and prepare for the onset of competition following the slashing of import tariffs to zero by 2018. Tran also called for further government support to help develop the burgeoning local spare parts industry.
For his part, Deputy PM Hoang praised Thaco’s recent work and also said that the government would be looking favourably on Quang Nam province’s proposal to develop a new autos manufacturing centre within the Chu Lai open economic zone.
Name change for Vidamco In September 2011, General Motors Company (GM) announced that it would be changing the name of its Vietnamese operation from Vidamco to GM Vietnam. At the same time, the company announced that it would now be selling all of its cars under the Chevrolet brand, with production and sales of Daewoo branded cars to stop immediately. The company will continue to provide after-sales care and spare parts for owners of Daewoo cars.
GM Vietnam plans to launch three new Chevrolet models in Vietnam before the end of the year and to upgrade its dealer network and service centres. According to the company, Chevrolet sales were up by 40% over the first eight months of the year.
As of September 2011, GM Vietnam had sold 7,353 CBUs year-to-date with a market share of 9.1%. This puts the company in third place in the Vietnamese market, behind Thaco and Toyota Vietnam. The company’s best-selling model is currently the compact Cruze, which has sold 2,009 CBUs in the year to September 2011.
Contents
Executive SummarySWOT Analysis
Vietnam Autos Industry SWOT
Vietnam Political SWOT
Vietnam Economic SWOT
Vietnam Business Environment SWOT
Global Overview
Industry Trend Analysis – Economic Woes Weigh On Car Demand
Table: Passenger Car Sales (Units), Jan-August 2011
Developed Slowdown
Domestic Troubles
Slowdown: Blame It On Outsiders
Regional Overview
Industry News – Thai Floods Threaten Regional Car Sales
Business Environment Ratings
Table: Business Environment Ratings – Auto Industry Asia Pacific
Macroeconomic Forecast Scenario
Table: Vietnam – Economic Activity
Industry Forecast Scenario
Table: Vietnam Autos Sector – Historical Data And Forecasts
Market Overview
Table: New Vehicle Sales By Top 10 VAMA Members (CBUs)
Table: New Vehicle Sales By Top 10 VAMA Members (CBUs)
Industry Developments
Passenger Cars – Forecast & Analysis
Table: Vietnam Autos Sector – Historical Data And Forecasts
Segment Developments
Commercial Vehicles – Forecast & Analysis
Table: Vietnam Autos Sector – Historical Data And Forecasts
Segment Developments
Suppliers – Analysis
Company Monitor
Company Profiles
GM Vietnam (formerly Vidamco)
Mercedes-Benz Vietnam
BMI Methodology
How We Generate Our Industry Forecasts
Automobile Industry
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