As car imports slow, sales of domestically assembled cars go up
Foreign-invested auto enterprises in Vietnam have canceled orders for imports from Thailand and Indonesia because they still cannot get certificates from agencies of export countries, as required by Decree 116, according to Pham Anh Tuan from the Vietnamese Auto Manufacturers Association (VAMA).
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To date, the circular guiding the implementation of the decree has not been issued. Therefore, waiting is the only choice for enterprises. No cars have been imported to Vietnam since the beginning of the year.
As imports still have not arrived, the prices of favorite models have been escalating. The situation is not expected to improve in the next three months. However, Tuan said domestically made products can satisfy domestic demand.
Vietnamese tend to buy valuable assets on the days before the new lunar new year. However, despite increased demand, the prices of products made by domestic joint ventures remain stable.
Some models even have selling prices tens of millions of dong less than the manufacturers’ suggested retail prices.
As imports are getting scarce, many people have decided to buy domestically assembled cars instead.
Observers said with the total assembly capacity of 500,000 products a year, the supply is still twice as much as demand. If demand surges unexpectedly, automobile manufacturers can easily adjust their car part import plans.
“The strike of workers in the Republic of Korea recently affected the car part supply. However, the imports will increase to satisfy domestic demand,” said Le Ngoc Duc, CEO of Hyundai Thanh Cong.
Meanwhile, import models such as Fortuner, Honda CR-V and Ford Everest cannot be found in the market, even though buyers are willing to pay high prices for them. The prices of pick-ups are predicted to increase.
The models will still be unavailable until imports arrive, because they are not assembled domestically.
In theory, manufacturers can resume the assembling of favorite models such as Toyota Fortuner and Honda CR-V. However, analysts said it will take manufacturers at least one year to prepare for resumption because they will have to upgrade production lines.
Whether or not enterprises resume the assembling of some models will depend on policies on imports. If imports do not resume, they may consider assembling some models to offset the import shortage.
The Ministry of Industry and Investment (MPI) said it will take measures to tighten control over imports and support domestic production.
