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

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

May 9, 2012

LookAtVietnam – 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.
Source: Dat Viet

Big automobile manufacturers leaving Vietnam? | Look At Vietnam - Vietnam news daily update

Big automobile manufacturers leaving Vietnam?

November 28, 2011 about Uncategorized

LookAtVietnam - If Vietnam cannot develop the automobile industry, it
will have to spend 12 billion dollars a year to import cars by 2025. If so,
Vietnam will have to suffer more serious trade imbalance, while the big
automobile market will fall into the hands of foreigners.

There are now 12 foreign invested automobile assemblers in Vietnam. However, no
one can say for sure how many assemblers will still in Vietnam after 2018.
Tachibana, General Director of Toyota Vietnam, has predicted that only three
foreign invested automobile manufacturers still exist by 2018. Meanwhile, some
experts think that all of the existing manufacturers would leave Vietnam by that
time.
Foreign invested automobile enterprises did not say clearly about their future
in Vietnam when they were asked about the business plan for the future.
Meanwhile some analysts have imagined that once the automobile import tariff
decreases to 0-5 percent, CBU cars (cars under the mode of complete built units)
will flock into the market. By that time, domestically made cars will not be
able to compete with imports, which will force foreign invested enterprises
leave. There will be only the sales agents which distribute import cars and
provide post-sale services for foreign manufacturers.
By 2014, the import tariffs to be applied to the imports from ASEAN countries
will be slashed to 50 percent. Experts believe that with the tariffs,
domestically made products will not be able to compete with imports, let alone
the lower tariff of zero percent to be applied by 2018.
The current Vietnamese automobile industry is described as “underdeveloped” with
80 percent of car parts imported from foreign countries. The domestic automobile
market is small with the consumption level of 150,000 cars per annum. Meanwhile,
Vietnam does not encourage car consumption, while the policies are changeable,
which both have automobile manufacturers feel unsafe with their investments.
The Vietnamese automobile industry is believed not to develop strongly enough to
satisfy the domestic demand in the next six years. Meanwhile, technical barriers
are believed to be unable to prevent imports from flocking to Vietnam, because
Vietnam is lagging behind other countries with backward technologies.
Experts agree that the technical barriers to be set up by Vietnam will not be
able to prevent the products used more advanced technologies.
For example, Vietnam is now applying the Euro 2 emission standard and planning
to apply Euro 4 by 2018. Meanwhile, the standards have been applied in developed
countries for a long time already.
Instead of choosing Vietnam, investors are now heading for Indonesia.
Japanese Toyota Group recently has decided to invest 200 million dollars on a
production line in Indonesia to make Innovas (70,000 cars per annum). To date,
the Japanese automobile manufacturer has 2 production bases in Indonesia already
with the capacity of 300,000 cars per annum in total.
Nissan has also announced the plan to invest 320 million dollars in Indonesia to
raise the capacity of its plan in the west of Java by three times, and to build
an engine assembling plant nearby. Nissan plans to increase the production
capacity of the plan from 50,000 to 180,000 cars per annum.
Investors have predicted that Indonesia would become the biggest automobile
industry center in South East Asia which is even bigger than Thailand. If so,
there will be two big automobile centers in South East Asia which can provide 10
million cars a year to the region with the population of 600 million people.
Meanwhile, over the last 10 years, foreign automobile manufacturers keep
indifferent to making investment in Vietnam. Toyota once planned to develop
Innova in Vietnam. However, the changeable policies here have discouraged them.
More than 10 years ago, Ford also considered Vietnam an attractive destination
for investment. However, it is now focusing its investment in Thailand and the
Philippines instead of Vietnam.
According to Ngo Van Tru, Deputy Director of the Heavy Industries Department of
the Ministry of Industry and Trade, Vietnam would see 166,000-235,000 new cars
to join the market by 2015 and 246,000-347,000 cars by 2020. Of this amount,
buses and trucks only account for 27 percent, while the remaining are private
cars.
Tran Thuy






Big automobile manufacturers leaving Vietnam? | Look At Vietnam - Vietnam news daily update

Hyundai to launch $5k car in India

Seoul: South Korean carmaker Hyundai Motor Co plans to produce a new model in India priced as low as $5,000 and targeting emerging countries, Japanese business daily Nikkei reported.

Lheem Heung-soo, chief executive of Hyundai Motor India Ltd, told Nikkei in an interview the 800cc car, to be manufactured at its Chennai factory, would retail for $5,000-$6,000, adding the vehicle's debut was several years away.

In addition to the roll-out in India, where Hyundai is ranked No. 2, the model will be shipped to other emerging countries, the paper said.

A Hyundai spokeswoman in Seoul said the company was developing a small-size model in India but declined to give details such as the likely price or timing of sale.

Vietnam Jan-July car sales more than double

HANOI, Aug 7 (Reuters) - Car sales in Vietnam have more than doubled so far this year, with Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) retaining its lead as the country's top seller, the Vietnam Automobile Manufacturers Association said on Thursday.
Sixteen car makers sold a combined 77,067 units during the first seven months ending July, up 120 percent from the same period last year, the association said in its monthly report.
Sales last month rose nearly one-third to 8,458 units from 6,474 units in July 2007, but were lower than 9,749 units sold this June, partly reflecting a slowdown in Vietnam's economy.
The country's economic growth slowed in the first half to an estimated 6.5 percent compared with the same period of 2007, when the annual growth was 7.91 percent.
Dealers said demand for cars in the remaining months of this year would slow after the government said it will triple registration fees to 15 percent from Aug 14, and following a 36 percent rise in fuel prices from July 21.
Toyota and Honda Motor Co Ltd (7267.T: Quote, Profile, Research, Stock Buzz) also have raised their prices, citing higher raw material prices globally and soaring inflation in Vietnam.
In the first seven months, Toyota retained its lead among the 12 manufacturers backed by foreign firms, selling 14,941 cars, up 50 percent from the same period last year.
The government planned further import tax hikes to help reduce worsening road congestion, which dealers said have prompted purchases to surge before the new tax rate comes in.
Vietnam has already raised tariffs on imported cars to 83 percent from 70 percent previously. Continued...

Toyota revs up for small car in India

Bangalore July 31: Global automobile giant Toyota Motor Corporation (TMC) on Thursday set the ball rolling for a newly designed compact car for the Indian market by laying the foundation stone for a Rs 1,400 crore new factory near Bangalore. The new compact car, expected to hit the Indian roads by mid-2010, is currently being developed by Toyota engineers with inputs from Indian engineers, top company officials said here today.
The foundation stone was laid at Bidadi, about 40 kms from here by the Karnataka Chief Minister B S Yeddyurappa in the presence of Akira Okabe, Senior Managing Director, TMC, Ryoichi Sasaki, Chairman, Vikram Kirloskar, Vice Chairman and Hiroshi Nakagawa, managing director, Toyota Kirloskar Motor Pvt Ltd.
"The factory will be ready by mid-2010 and we are yet to finalise the launch date of the new car. We have basic concept of the new car ready and very shortly we will finalise the design of the car," Okabe told reporters.
He said the second plant will see an initial investment of Rs 1,400 crore. However, the investment does not include certain other costs like installing robots, jiggs, a special type of tool among others. The additional amount of investment required for the plant will be worked out later, he said. The second plant will be spred over 130 acres of land and includes a new test track. The plant will have an installed capacity of 100,000 units annually and will employ 2,400 people.
Though the new compact car is designed for the Indian market, the initial design features indicate that it can be exported to other markets in Asia, Okabe said.
Toyota's first plant in India was built in 1998 with a capacity to produce 60,000 units per annum. It manufactures Innova, a multi utility vehicle and luxury sedan Toyota Corolla. While the premium luxury car, Toyota Camry and sports utility vehcile, Prado are imported as completely built units. "Toyota aims to capture 10 per cent of the Indian passenger car market by 2010. The new plant will help us achieve this target between 2010 and 2015," Okabe said. Currently, Toyota has 3 per cent market share in the 1.2 million car market in India.
Okabe said Toyota will not involve its group company, Daihatsu, in designing the new compact car for the Indian markets. However, the company may involve them in the future projects, he added.
Toyota has till now invested Rs 2,000 crore in the Indian subsidiary, Toyota Kirloskar Motor Pvt Ltd along with the Pune-based Kirloskar group as its partner, which holds 11 per cent.
Toyota also manufactures transmission kits (gear boxes) for its global production facilities from its another subisidary company -- Toyota Kirloskar Auto Parts Ltd, located near the first plant. The installed capacity is 630 units per day.
TKM, reported a turnover of Rs 3,600 crore during 2007-08, registering a growth of 24 per cent over the previous year.

Vietnam Jan-May car sales soar 162 pct yr/yr

HANOI, June 6 (Reuters) - Auto sales in Vietnam more than doubled in the first five months of 2008 from the same period last year, the Vietnam Automobile Manufacturers Association said on Friday, as buyers rushed to avoid planned higher taxes.

Total sales by 16 car makers jumped 162 percent to 58,860 cars in January-May, with the figure last month alone doubling from May last year to 11,494 units, the association said in its monthly report.

Toyota (7203.T: Quote, Profile, Research) kept its lead among the 12 manufacturers backed by foreign firms, with sales of 10,228 cars between January-May, compared with 6,388 cars sold a year ago.

The government's plan to increase registration fees to up to 15 percent in 2008 from the current 5 percent has boosted purchases ahead of the the tax hike, dealers said.

The government has said it planned to raise the tax to discourage the use of cars to reduce worsening road congestion. It has already hiked tariffs on imported cars to 83 percent from 70 percent previously.

Vietnam's car imports in the first five months surged 292 percent to $1.31 billion, with the volume of fully assembled vehicles jumping six-fold to 35,400 units, the government has said.

Ford Motor Co (F.N: Quote, Profile, Research), Honda Motor Co Ltd (7267.T: Quote, Profile, Research), Mitsubishi Motors Corp (7211.T: Quote, Profile, Research), Mitsubishi Co and Proton (PROT.KL: Quote, Profile, Research), Suzuki Motor Corp (7269.T: Quote, Profile, Research) and Nissho Iwai, part of Sojitz Holdings Corp (2768.T: Quote, Profile, Research) are among foreign firms which assemble cars in Vietnam. (Reporting by Nguyen Nhat Lam; Editing by Anshuman Daga)