Expensive cars dislodged from Vietnam, low-cost cars flood the market

The Vietnamese automobile market, which once cooled down after the news about the tax and fee increases, has warmed up again with the appearance of small size cars, brand new and very cheap.

Since early May 2012, the images of Zotye Z100, the Chinese latest small car model, which is forecast to be the redoubtable rival of the current cheapest car model Tata Nano, have been spread from each other among the Internet users’ community.

With the eye catching appearance, Zotye Z100 has 1.0L engine. The medium version has the starting price at 23,800 yuan, or 3700 dollars or 80 million dong. Meanwhile, higher grade version is priced at 25,800 yuan, or 4000 dollars or 85 million dong.

Regarding the interior equipments, though being listed as low cost product, Zotye Z100 also has air conditioner and felt chairs. The vehicle has been launched in Hangzhou, where the headquarters of Zotye is located.

In the past, Zotye specialized in providing car parts of different kinds. However, since 2005, when it bought Auto Jiang Nan, it began joining the group of Chinese automobile manufacturers.

Another model of the low-cost market segment – Bajaj RE60, the small size one introduced at the Indian Automobile Exhibition on January 3 – has surpassed the fellow-countryman Tata Nano to become the cheapest model in the world with the sale price of 3300 dollars.

Bajaj RE60 has also entered its name on the history of the modern automobile manufacturing industry as the vehicle with the smallest engine after the World War 2. With the cylinder capacity of 200 cubic meters, Bajaj RE60 only has the capacity of 20 horsepower and can reach the maximum speed of 70 kilometers per hour.

The weight of Bajaj RE60 is 400 kilos, while the fuel consumption is attractively low 2.83 liters per 100 kilometers. With four seats, RE60 has the length of 2752 mm.

Indian Tata once caught the special attention in the world when launching the low cost Nano car model in 2008. In the domestic market, Nano is sold at 100,000 rupee, or 2172 dollars. However, Nano is sold at 7000-8000 dollars to the US clients. Meanwhile, President of Tata Group still believes that this is a very competitive price which would be accepted by the buyers there.

In October 2011, Vietnamese newspapers repeatedly reported the Indian group’s plans to build a factory in Vietnam, capitalized at 5 billion dollars, for making the world’s cheapest cars.

However, experts have warned that Nano may not be a low cost model when it enters the Vietnamese market, because of the current tax and fee policies being applied in the country. They said that Nano may turn out to be expensive in Vietnam with the price triple the original price. At present, Vietnam is considered the market with the highest car prices in the world due to the investment and tax policies.

The prices of the cars made in Vietnam are 2.5 times higher than in the US. A Camry 2.4 made by Toyota Vietnam, for example, is priced at 1 billion dong, or 50,000 dollars. Meanwhile, a Camry 2.5 in the US made by Toyota USA is sold at 20,000 dollars only.

A Civic Si 2.4, which has the sale price at 22,000 dollars in the US, would be priced no less than 40,000 dollars in Vietnam.

Car experts have said it’s too early to say that the low cost cars would trigger a new tendency in car consumption in Vietnam, but they would create a “low-cost car revolution” in the country, where people have to pay too high to possess cars.