Sources say Daihatsu is planning to return to Vietnam with small-size and low-cost car models. Daihatsu, of Toyota, specializing in small-size cars with the engine capacity of 1.5 L and less, is a well-known brand in South East Asia.

Daihatsu has its main production base in Indonesia. The best known small-size car model is Ayla, which is priced at VND200 million. At Vietnam Auto 2017, Toyota Vietnam introduced Wigo, 90 percent of which was similar to Ayla.

Analysts said Daihatsu Ayla may officially be marketed in Vietnam together with Toyota Wigo, providing one more choice to customers who seek smaller models.

Two Malaysia manufacturers – Proton and Perodua - are also reportedly preparing to join the Vietnamese market after 2018. The two manufacturers now account for 48 percent of the Malaysian automobile market. 

Proton has eight product lines priced at between VND200 million and VND700 million. Meanwhile, Perodua has four product lines with prices of VND130-360 million.

Analysts believe that new car brands will enter the Vietnamese market after 2018 when import tariffs fall, providing products at low prices and targeting middle-income earners.

The common characteristic of the Malaysian products is that they have ‘very reasonable prices’ compared with Japanese branded cars.

Proton’s Persona model, for example, is the direct rival to Toyota Vios and Honda City. Persona is priced at VND303 million, lower by VND106 million than Honda City and VND154 million than Toyota Vios.

The small-size car market segment is expected to be busier after 2018 as the existing manufacturers will also import small-size models for domestic sale. Honda Vietnam has introduced Jazz, while Toyota Vietnam has introduced Wigo. Suzuki, Nissan and Mitsubishi will also introduce their small-size models.

If so, Kia Morning, Hyundai Grand i10 and Chevrolet Spark, the small-size models now available in the market, would have more rivals.

2018 will be an important milestone for the Vietnamese automobile market as the CBU imports from ASEAN will see the tariff cut to zero percent. 

The luxury tax on the cars with cylinder capacity of 1.5 L and less will be cut to 35 percent, while the tax rate will be 40 percent for 1.5-2.0L models. 

The tax reductions will help small-size car prices fall significantly. It is expected that small-size cars will be valued at less than VND350 million.

Pay less, use more

Analysts believe the Vietnamese automobile market will be very competitive after 2018, while the small-size market segment will be the busiest. The car models will be equipped with the most advanced facilities (speed advisory system and traffic situation update), but the prices will be reasonable.

Toyota Vietnam’s general director Kinoshita said customers will “pay less and use more”. 

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Tran Thuy