Foreign auto influx challenges domestic manufacturers

Vietnam is a lucrative car market and a lot of foreign automobile manufacturers are bringing their products to sell in Vietnam, providing fierce competition with domestic products.

Four international auto brand names have appeared in Vietnam within just the last two months.

China’s Dong Feng in early November 2009 signed a cooperation agreement with a Vietnamese company, under which the Dong Feng brand will be distributed in Vietnam. They also have plans to manufacture Dong Feng vehicles in Vietnam.

One week later, Volkswagen signed a cooperation contract to name World Auto as its official distributor. The appearance of the VW is considered a nice surprise.

At its debut ceremony, World Auto launched four models, including the New Beetle, Passat, Tiguan and Touareg.

Two more brands arrived in December, Chrysler and Subaru.

Chrysler models will be distributed by IC Auto. Currently, Chrysler has a showroom in HCM City and is introducing four models, including Chrysler 300C, Jeep Wrangler, Dodge Journey and Nitro

Since it is unfamiliar to Vietnamese customers, Subaru brand has decided to use a Vietnamese distributor.

If counting Alfa Romeo of Italian Fiat Group selling through Mekong Auto, the number of auto brand names that have joined Vietnam’s market in the last two months would be five instead of four. Fiat is more familiar with its Fiat 500, which has been available in Vietnam for one year.

The domestic auto market is also bustling with new brands.

Vietnam now has 10 automobile joint ventures, one 100 percent foreign-owned enterprise (GM Daewoo) and one domestic manufacturer (Truong Hai). The manufacturers make vehicles of 17 world brand names, including Fiat, Ssangyong, PMC, Mazda, Kia, Chevrolet, Daewoo, Mitsubishi, Mercedes-Benz, Suzuki, Toyota, Isuzu, Ford, Hino, Hyundai (trucks, bus), Chery and Honda.  

Meanwhile, existing Vietnamese distributors offer more than 10 brands in Vietnam, BMW (Euro Auto), Audi, Porsche (PSC), Hyundai (Thanh Cong), Lifan (Bao Toan), Volkswagen (World Auto), Chrysler (IC Auto), Subaru (MIV), Dong Feng, MAN (VMC) and Fiat - Alfa Romeo (Mekong Auto).

Many automobile manufacturers, together with assembling cars, have also decided to import vehicles from parent groups to sell domestically. As such, the number of distributors and models available has been increasing dramatically.

According to the General Statistics Office, 66,300 cars have been imported to Vietnam in the first 11 months of 2009. Meanwhile, 16 automobile members of the Vietnam Automobile Manufacturers’ Association (VAMA) have been selling cars like hot cakes.