Vietnam sees car imports double
Dwindling sales of locally assembled cars and rising sales of imports are causing local manufacturers to demand more tax incentives to compete.
In the first 11 months of the year sales of locally made vehicles fell by 13 percent year-on-year to 169,739 units, while that of imported cars doubled to 119,389, according to the Vietnam Automobile Manufacturers Association (VAMA).
The surge in sales of imports follows a slump in 2018 due to a decree that stipulated tougher conditions for car importers, requiring them to provide certain certificates to ensure quality and countries of origin.
The number of imported units fell by 20 percent last year, but rose 96 percent year-on-year this year to 133,700 units.
They cost almost $3 billion, and the Ministry of Industry and Trade has estimated this figure could hit a record $3.4 billion for the full year, almost double last year’s.
Though locally assembled vehicles still dominate sales, the surge in imports of complete-built units concern manufacturers. Pham Van Tai, CEO of Truong Hai Auto (THACO), had suggested last month that the country should scrap imports tax on car parts that cannot be made locally.
Vietnam has been struggling to grow its auto industry for decades. Last year 288,700 units were sold, compared to Thailand’s million-odd units and Indonesia’s 1.1 million, according to auto database Marklines.
The country’s local parts rate for passenger cars is 7-10 percent compared to 80 percent in Thailand and 70 percent in Indonesia.