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BMW gears up for premium auto market
2010-0129
Viet Nam possesses large market potential for both domestically-assembled and imported cars in Asia. Last year, the country reported a high sales volume of domestically-assembled and imported vehicles, which has already surpassed expections despite the presence of the global recession. Viet Nam News talks with Johannes Seibert, Managing Director of BMW Asia, about automobile issues in the country.
What is your assessment of the potential of Viet Nam’s automobile industry?
Viet Nam is one of the key markets that contributed to the growth and development of BMWA in 2009. Also, the country is one of the fastest growing economies in the world, in which the automobile industry has market potential to develop. We are very confident that Viet Nam is a very important market for us and it will continue to grow.
There has been a lot of improvements in the development of infrastructure in urban areas recently. Poor infrastructure will be a big challenge in the coming years due to the increasing consumer demand. On the other hand, developing infrastructure is more than just building roads and bridges. Parking facilities also need to be built.
The Vietnamese Government is preparing for the development of the automobile population and we hope that everything will be in line so that cars will become popular with the citizens of Viet Nam.
How will Viet Nam’s automobile industry cope with competition from ASEAN competitors such as Thailand, Malaysia and the Philippines?
Viet Nam is part of ASEAN and AFTA, so the country enjoys the levied preferable taxes from regional countries, therefore, these countries help provide opportunities, not threats.
Due to the fact that most other countries in ASEAN drive on the left-hand side of the road, their vehicles cannot be used within Viet Nam and therefore are not a threat to the domestic market.
The most concerning issue from any authorised automobile importer in Viet Nam is the grey market, which refers to cars that have been imported from the US and the Middle East.
The automobile market in other ASEAN countries has been developing for a long time and have been guided by clear policies. With an increasing growth rate and a young and industrious labour force, Viet Nam will catch up with other countries in the region soon.
The automobile industry needs to receive support from the Government. Clear policies pertaining to taxes and regulations and a clear and long-term plan for the development of the automobile industry is necessary for success.
As you are aware, a tax increase has become effective since 31 December 2009, and it may affect the sales volume of both domestic and imported cars this year. Why did you choose to launch your new products at this time?
Before this interview, I conducted some research and noted that there were 11 changes in these taxes in the last two years, which makes it extremely difficult for us to plan our business strategy. We would appreciate it if the Government would create more stable policies in order to make it easy for companies to make sufficient business plans. We are quite optimistic with our 2010 business plan.
We launched a new product, the BMW 7 Series, on December 17, 2009. This was part of an approach to help increase consumer demand and warm up the automobile market before the end of 2009. For BMW, the price isn’t everything. We hope to introduce customers to our quality product, services and value. Moreover, Vietnamese consumers have become more and more sophisticated, and they don’t like new products to be launched too late in comparison with other markets. Therefore, we would prefer to bring and introduce new products to BMW lovers in Viet Nam in tandem with their introduction in other developed markets in the world.
Has BMW encountered any difficulties with its business operations and market expansion plans, especially competition from other luxury car markers?
As the world’s leading premium automaker, we welcome competition and are confident in our products. Discerning customers will be able to decide which car best suits their needs and requirements, and we hope that they appreciate BMW’s wide range of high quality premium cars.
The growing demand for BMW in Viet Nam is reflected in increased sale of 100 per cent in 2009. We recognize that we may be starting from lower base than our competitors, but it does demonstrate that local customers are appreciating the value proposition we offer.
Can you brief us about BMW’s plans for expansion in the world and Vietnamese market this year? What is the company’s target growth rate for this year?
In 2009, it was obvious a difficult year world-wide for business. We closed the year with a sales volume of 1.287 million vehicles, which is roughly a 10 per cent drop from 2008 sales. We want to increase our share in the luxury and premium markets. We want to develop more than our competitors. Internationally, we want to increase our market share.
In Viet Nam, the market is recovering quickly from the global crisis. The country only suffered a mini crisis and the stimulus programme from the Government has been effective. The programme has offered incentives for car buyers and it has reduced registration fees and value added taxes, which have made car prices cheaper. We are quite optimistic for Vietnamese sales, because we believe that Viet Nam’s market is filled with people that will buy premium cars. This is the reason why we have decided to improve our infrastructure facilities and our service network here.
Our current facility in Ha Noi is now too small to meet the demand of the customers. Therefore, we are planning to establish a new facility in the capital city next year, which will focus on bringing outstanding retail and customer service experience to our growing clientele base in Viet Nam.
What is your assessment of the potential of Viet Nam’s automobile industry?
Viet Nam is one of the key markets that contributed to the growth and development of BMWA in 2009. Also, the country is one of the fastest growing economies in the world, in which the automobile industry has market potential to develop. We are very confident that Viet Nam is a very important market for us and it will continue to grow.
There has been a lot of improvements in the development of infrastructure in urban areas recently. Poor infrastructure will be a big challenge in the coming years due to the increasing consumer demand. On the other hand, developing infrastructure is more than just building roads and bridges. Parking facilities also need to be built.
The Vietnamese Government is preparing for the development of the automobile population and we hope that everything will be in line so that cars will become popular with the citizens of Viet Nam.
How will Viet Nam’s automobile industry cope with competition from ASEAN competitors such as Thailand, Malaysia and the Philippines?
Viet Nam is part of ASEAN and AFTA, so the country enjoys the levied preferable taxes from regional countries, therefore, these countries help provide opportunities, not threats.
Due to the fact that most other countries in ASEAN drive on the left-hand side of the road, their vehicles cannot be used within Viet Nam and therefore are not a threat to the domestic market.
The most concerning issue from any authorised automobile importer in Viet Nam is the grey market, which refers to cars that have been imported from the US and the Middle East.
The automobile market in other ASEAN countries has been developing for a long time and have been guided by clear policies. With an increasing growth rate and a young and industrious labour force, Viet Nam will catch up with other countries in the region soon.
The automobile industry needs to receive support from the Government. Clear policies pertaining to taxes and regulations and a clear and long-term plan for the development of the automobile industry is necessary for success.
As you are aware, a tax increase has become effective since 31 December 2009, and it may affect the sales volume of both domestic and imported cars this year. Why did you choose to launch your new products at this time?
Before this interview, I conducted some research and noted that there were 11 changes in these taxes in the last two years, which makes it extremely difficult for us to plan our business strategy. We would appreciate it if the Government would create more stable policies in order to make it easy for companies to make sufficient business plans. We are quite optimistic with our 2010 business plan.
We launched a new product, the BMW 7 Series, on December 17, 2009. This was part of an approach to help increase consumer demand and warm up the automobile market before the end of 2009. For BMW, the price isn’t everything. We hope to introduce customers to our quality product, services and value. Moreover, Vietnamese consumers have become more and more sophisticated, and they don’t like new products to be launched too late in comparison with other markets. Therefore, we would prefer to bring and introduce new products to BMW lovers in Viet Nam in tandem with their introduction in other developed markets in the world.
Has BMW encountered any difficulties with its business operations and market expansion plans, especially competition from other luxury car markers?
As the world’s leading premium automaker, we welcome competition and are confident in our products. Discerning customers will be able to decide which car best suits their needs and requirements, and we hope that they appreciate BMW’s wide range of high quality premium cars.
The growing demand for BMW in Viet Nam is reflected in increased sale of 100 per cent in 2009. We recognize that we may be starting from lower base than our competitors, but it does demonstrate that local customers are appreciating the value proposition we offer.
Can you brief us about BMW’s plans for expansion in the world and Vietnamese market this year? What is the company’s target growth rate for this year?
In 2009, it was obvious a difficult year world-wide for business. We closed the year with a sales volume of 1.287 million vehicles, which is roughly a 10 per cent drop from 2008 sales. We want to increase our share in the luxury and premium markets. We want to develop more than our competitors. Internationally, we want to increase our market share.
In Viet Nam, the market is recovering quickly from the global crisis. The country only suffered a mini crisis and the stimulus programme from the Government has been effective. The programme has offered incentives for car buyers and it has reduced registration fees and value added taxes, which have made car prices cheaper. We are quite optimistic for Vietnamese sales, because we believe that Viet Nam’s market is filled with people that will buy premium cars. This is the reason why we have decided to improve our infrastructure facilities and our service network here.
Our current facility in Ha Noi is now too small to meet the demand of the customers. Therefore, we are planning to establish a new facility in the capital city next year, which will focus on bringing outstanding retail and customer service experience to our growing clientele base in Viet Nam.
Source: VNS
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