Foreign-invested automobile manufacturers have denied a MOIT report about Vietnam’s automobile industry that says assembled-in-Vietnam cars are twice as expensive as Thailand’s and Indonesia’s.

VietNamNet Bridge - Though demand for low-cost cars in Vietnam is high, low-cost car manufacturers have failed to enter the market.

VietNamNet Bridge - For most Vietnamese consumers, a house and car are two of the most valuable assets.

Vietnamese auto manufacturers are trying to increase the localization ratios in their products in order to enjoy preferential tariffs when exporting their cars to ASEAN countries.

Car prices in Vietnam are nearly two times higher than in other countries in the region such as Thailand and Indonesia, and much higher than in countries with developed automobile industries such as the US and Japan. 

The domestic market will open more widely to foreign cars as enterprises now will not be required to submit as many documents as they did before, as stipulated in Circular No 20/2011.

Contrary to all predictions, automobile manufacturers have set modest targets for this year’s business plans. After a two-year boom, the automobile market is expected to be more quiet in 2017.

VietNamNet Bridge - The tariff cut to zero percent will pave the way for imports from ASEAN to flood Vietnam, but analysts do not think low-cost cars will be available by 2018. 

VietNamNet Bridge - Vietnamese packaging firms, especially small and medium sized, have to compete with foreign firms which have advantages in technology and financial capability, and must rely on imported materials.

VietNamNet Bridge - More Vietnamese are buying imported fruit, which have become surprisingly inexpensive.

VietNamNet Bridge - After five years of implementing a master plan on the footwear industry by 2020, Vietnam still mostly does outsourcing for foreign partners. 

VietNamNet Bridge - Thanh Cong and Truong Hai are determined to export cars, despite a cut in import tariffs on cars scheduled to take effect in 2018. 

VietNamNet Bridge - Though made-in-Vietnam goods are becoming more popular, foreign goods still hold the upper hand in the home market.

VietNamNet Bridge - Despite tariff cuts and low import prices, Vietnamese still have to pay high prices to buy cars because of high taxes and fees.

VietNamNet Bridge - While Indian cars are cheap with the average import price of VND84 million, French autos are the most expensive with the average import price of VND1.3 billion.

VietNamNet Bridge - The tariff cuts applied to imports from ASEAN and the luxury tax based on cylinder capacity are expected to encourage the import of more low-cost models. 

Despite failure in developing an auto industry in the last two decades, Vietnam still dreams of building an industry of its own. 

VietNamNet Bridge - ASEAN, together with China, should be the most important partner for Vietnam. However, Vietnamese enterprises are not keen on exporting their products to the market.

VietNamNet Bridge - Thousands of products from member countries of the ASEAN-China Free Trade Agreement (ACFTA), including China, will enjoy a preferential tariff of zero percent.

VietNamNet Bridge - Though the ASEAN jewelry market is large, Vietnamese companies are struggling to enter the market worth billions of dollars.