VIET NAM NET

Pricewaterhouse Coopers forecasts Hanoi and HCM City will rank first and second in the list of the world’s 30 cities with the highest growth rates between 2008 and 2025.

Hanoi today

The annual gross domestic product (GDP) of the two cities will grow at an average seven percent rate during this period, PwC predicted.

Hanoi and HCM City are followed by the Chinese cities of Changchun (3^rd) and Guangzhou (4^th) in the list, which includes 12 from India, seven others from China and none from developed countries. It clearly indicates that the global balance is tilting toward emerging economies.

PwC’s research results from151 cities in the world show the GDP of the 100 largest cities make up 30 percent of the global total in 2008.

Hanoi and HCM cities are predicted to be among the most prominent cities in the world by 2025. Specifically, HCM City will jump from 95^th place in 2008 to 64^th place in 2025 while Hanoi will climb from 116^th position in 2008 to 82^nd position in 2025, according to the report.

PV

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Vietnam to devalue Currency 4% by end of year

Vietnam will probably devalue its currency 4 percent by the end of the year, as the government prioritizes boosting exports to help growth ahead of fighting inflation, ANZ predicted.

The dong is currently trading at about 17,825 per dollar, down from 17,486 at the end of 2008, according to prices compiled by Bloomberg. The exchange rate will probably drop to 18,500 by year-end, wrote Tamara Henderson, a strategist at Australia & New Zealand Banking Group Ltd., in a research note Tuesday.

“The government’s priority at the moment is to get growth back on track and deal with inflationary pressures if and when they emerge,” Singapore-based Henderson said in a telephone interview Tuesday.

Vietnam is targeting economic growth of at least 5 percent this year, up from a 3.9 percent first-half expansion, and plans to revive exports after they declined 14 percent year-on-year through August.

The State Bank of Vietnam let the currency weaken 8.5 percent last year by widening the trading band, and lowering the reference rate.

Year-on-year inflation slowed to 2 percent through August, the lowest rate since 2002. A year-long deceleration in inflation is “almost certainly” over, with price pressures rising, ANZ said.

‘Long wait’

“Concerns about inflation have already started to weigh on the dong,” Henderson wrote in the note. Further weakening of the dong should support exports during the “long wait” for US and European consumer demand to pick up, she said.

“Devaluing the currency will also make imports more expensive, which can help address trade imbalances,” Henderson said by telephone. Any devaluation will probably take place toward the end of the year, she said. By the end of 2010, the currency is likely to trade at about 19,300 per dollar, according to ANZ.

Vietnam recorded a trade deficit of US$5.1 billion in the year through August, according to estimates from the General Statistics Office in Hanoi. The shortfall has “deteriorated sharply” from a surplus in the first quarter, ANZ said.

Foreign investment, both through projects and through the country’s stock markets, is “lackluster,” Henderson wrote.

“Without an imminent improvement in global demand conditions, Vietnam’s external position will quickly deteriorate,” she wrote.

Southeast Asia’s premier destination

ot on the heels of Thailand and Malaysia, Vietnam is positioning itself as the next big must visit destination in Southeast Asia, according to the UK’s “Independent” newspaper.

The article “Property abroad: Vietnam” on June 3 wrote about the opportunities for investment in Vietnam’s luxury beachfront resorts – a sound decision for foreigners who want to buy property in Vietnam.

The article wrote: “Vietnam's stunning coastline, historic sites and bustling cities attract around four million visitors annually. Many tourists opt to stay in luxury coastal resorts in areas such as Hoi An and Nha Trang.”

It said that Vietnam has seen unprecedented growth in tourism and investment in the past decade and investment opportunities have been expanded after the government relaxed its law on foreign property ownership.

According to the newspaper, there are a great number of foreign investors eyeing up luxury beachfront resorts. International names like Hyatt Regency, Banyan Tree and Six Senses all have projects in the planning stages, which will offer residential units alongside spas, bars and tennis courts.

The newspaper quoted Rudy van Bork of La Perla International Living, which is developing Bai Tram, a luxury beachfront resort in Phu Yen, as saying that the first units have already been reserved and have had a lot of interest from overseas buyers.

“Compared to other prime destinations, such as Bali in Indonesia, Vietnamese properties are not expensive,” he said.

CEO Brett Ashton of Savills said that Vietnam is only showing the tip of its potential. "Pricing is still significantly lower than in more mature residential resort locations such as Phuket or Bali," he said, "but coastal properties have a limited supply and prices should rise over the short to medium term." Savills is already selling luxury villas in Vietnam’s luxury resorts.

VietNamNet/VNA

2008 witnessed biggest ever car sales

Sixteen member companies of the Vietnam Automobile Manufacturers’ Association (VAMA) reportedly sold 110,186 cars in 2008. Many manufacturers had the impressive growth rate in the year in comparison with 2007.


After the gloomy month of November, when only 5,174 cars were sold, local automobile manufacturers had a better month in December, while the sixteen companies sold 9,239 cars.

Toyota Vietnam, for example, sold 2,605 cars in December, which is an increase of 1,140 cars over November 2008. Honda Vietnam sold 568 cars, an increase of 467 cars over November, while Ford Vietnam 600 cars, up 302, and GM Daewoo 917 cars, up 228.

The car model which saw the highest sales increase in the month was the Innova by Toyota with 1,712 cars sold, representing the increase of approximately 1,000 cars over November 2008. Other models like Capita from GM Daewoo, the 4WD Everest, and Honda Civic also had the sales up two to four times more than in November.

Domestically owned manufacturers like Truong Hai, Vinamotor, and Vinaxuki also saw a sharp increase in sales in December. Truong Hai, for example, sold 1,448 cars, which was double that in November, while Vinaxuki 526 cars, up by 200 and Vinamotor with 1,351, up by 400.

Big price discounts and promotion program have been cited to explain the sales increase in the month. Some models had the price reductions of up to US $4,000 which helped attract more clients.

Customers rushed to purchase cars in December as they fear that the new tax policies changes will lead to the car price increases. They tried to purchase cars in order to avoid the tax increases while they have cars to drive on Tet days.

2008 proved to be the year which witnessed the highest car sales ever with the sales of several manufacturers this year higher by far than the previous year. GM Daewoo had 11,036, up from 7,580, Ford Vietnam with 6,494, up from 5,975, Honda Vietnam had 5,909, up from 4,260, Vinaxuki with 8,070, up from 7,358, Truong Hai had 16,373, up from 11,534 and Vinamotor with 20,887, up from 5,476.

However, some other manufacturers had the sales decrease in 2008 in comparison with 2007, including Mercedes Benz, Vinastar and Isuzu.

Vinastar proved to be the enterprise which saw the sharpest car sales decrease from 4,595 cars in 2007 to 2,925 in 2008, followed by Isuzu from 4,229 cars in 2007 to 3,385 in 2008.

In general, 2008 was a good year for automobile manufacturers, when most of them enjoyed business prosperity and the output increased by approximately 30,000 cars compared to 2007.

The big car sales were obtained mostly in the first half of the last year. According to VAMA, in the first half of 2008, the member companies sold 68,609 cars or 85% of total sales in 2007. The automobile manufacturers only really met difficulties in October and November 2008.

Imported cars saw sharp increase in 2008. According to the General Statistics Office, in 2008, enterprises imported 50,400 cars of different kinds worth over US $1 billion, a two-fold increase over 2007 when only 22,400 cars were imported.

In 2008, though the import tax on complete built unit (CBU) increased two times in March and April, from 60% to 83%, the volume of imported cars still skyrocketed at that time. Importers tried to import many cars to sell in order to avoid the foretold tax increases.

To date, 15,000 imported cars have reportedly left unsold. However, even if not counting on the 15,000 cars, the number of sold cars exceeded the 140,000 unit threshold in 2008, which made 2008 become the year with the highest ever consumption.

Tran Thuy