Tough competition
The domestic automobile market has shown signs of recovery after automobile joint venture companies launched new models at competitive prices last month. In addition to Toyota Vietnam’s Innova and Mercedes-Benz Vietnam’s Sprinter, Honda Vietnam introduced a new model Civic re-named "2006 Car of the Year" by Motor Trend Magazine in the US.

The new Civic model is expected to change the market share of automobile joint venture companies in Vietnam as Honda products have been familiar with Vietnamese consumers for years. With selling prices ranging between US$31,500 and US$37,000 for 1.8L and 2.0L units, Honda’s Civic is the main competitive rival of Toyota’s Altis and Ford’s Focus which sell for from US$35,000 to US$40,000, respectively. Several days after its debut, nearly 30 Civic units have been sold.     

Meanwhile, JRD Vietnam plans to launch a new multi-functional model JRD Daily SUV III priced at between US$17,900 and US$18,900 on to the market this September. The new car was introduced at the Vietnam Autopetro exhibition in HCM City last month. With its determination to penetrate the lucrative Vietnamese market, JRD is expected to become a potential competitor in Vietnam as similar products of well-known groups double its given prices.

Chinese automobile makers do not want to miss the golden chance by marketing competitively cheap models such as four-seat CKD Lifan 520 imported by Bao Toan company and another kind of four-seat sedans assembled by Zhang Cheng company. These sedans are offered at between US$11,000 and US$16,000 per unit. 

Seeking new directions
However, Vietnamese consumers are still waiting for low cost automobiles especially when more and more second-hand vehicles are imported into Vietnam.

After a regulation on the import of five-year used automobiles came into effect, old luxurious vehicles have been imported through Hai Phong, Cai Lan, Ho Chi Minh City and Da Nang ports. In early September, some 100 used automobiles were imported, and the figure is expected to hit 500 by the end of this year. Most imported vehicles are of low capacity like 1.0L Kia Morning and some luxury models of BMW, Mercedes and Lexus which are not assembled locally.

Despite being used automobiles, their prices are not cheaper than locally-made new cars as they are still considered “smart” ones. Therefore, the domestic automobile market is unable to offer “reasonable” prices as expected.

In the face of tough competition, it is imperative for enterprises to reduce production costs and improve the quality of products while seeking more outlets.

Vinamotor Corporation is a case in point. The company has paid attention to improving the quality of busses and trucks while teaming up with other partners to mobilise capital for overseas projects. Vinamotor has so far exported 40 vehicles to Africa.

According to a representative of the Vinamotor Management Board, intensifying investment overseas will help the corporation save transport fees and expand export markets.

Regarding the future of the automobile industry in the coming time, Deputy Head of the Metallurgy and Chemical Engineering Department under the Ministry of Industry Ngo Van Thu said that enterprises which have proper plans for investment and technological transfer will likely stand firm against all odds on the market.