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Strategic Analysis of Passenger Vehicles Market in Vietnam - 2011
Frost & Sullivan, April 2011, Pages: 126
This research service covers in detail the passenger vehicle market in Vietnam. It covers Vietnam's macro economic indicators and demographic overview, mobility trends, market drivers and restraints, structure of Vietnam Automotive industry, automotive cluster in Vietnam that includes OEMs, tier 1, tier 2 suppliers. This research service also includes in detail Automotive recap 2009, automotive market outlook, OEM and supplier profiles, price positioning of different segment vehicles and their volume sales in 2009. Vietnam macro economic indicators include population, GDP growth, interest rates, exchange rates, population indicators.
Research Overview
This Frost & Sullivan research service titled Strategic Analysis of Passenger Vehicles Market in Vietnam explores the macroeconomic indicators and demographic overview of the country, mobility trends, market drivers and restraints, structure of the automotive industry as well as the automotive cluster that includes original equipment manufacturers (OEMs) and tier-1 and tier-2 suppliers. Vietnam’s macroeconomic indicators include population, gross domestic product (GDP) growth, interest rates, exchange rates and population indicators. In this research, Frost & Sullivan's expert analysts thoroughly examine the following modes of transport: public (train, air, public bus, ferry and taxi) and private (car, motorbikes and bicycle).
Market Overview
Rising Economic Growth and Limited Car Ownership Strengthen Growth of Passenger Vehicles Market in Vietnam despite High Prices
Consistent national economic growth, since 2006, is making the Vietnamese vehicle market increasingly attractive for investment. High per capita income has led to an increase in disposable income and purchasing power for the rising middle-aged population group, which is expected to opt for newer vehicles. “About 46.7 per cent of Vietnam’s population is in the car buying age group and considerable passenger vehicle sales can be expected at suitable price points,” notes the analyst of this research service. “Further, the country’s Automotive Master Plan aims to develop the road transport network and make the automotive industry an important one by 2020.”
A key restraint for the market is the high price of vehicles. The automobile buyer is charged a collection of taxes and charges, which pushes up the cost of the automobile by nearly 300-340 per cent. Though the local automakers are involved in the assembly of passenger vehicles from imported complete knock-down (CKD) kits, the assembled vehicles are unable to match up to the quality perception of consumers.
Passenger Vehicles Expected to Continue to Be the Most Popular Segment in 2011 with Sales Likely to be 59,237 Units
The automotive industry in Vietnam enjoys preferential treatment from the Government, which imposed high tariffs and import duties on imported cars and components that could be produced domestically, giving the locally assembled products a tremendous price advantage. Yet, the entry of international luxury car brands created an impressive growth in the luxury car market in the last few years. The total automotive sales is expected to grow by 3.5 per cent in 2011 to reach 116, 152 units, as the market recovers along with the country’s economy. Passenger vehicles will continue to be the most popular segment in 2011 with sales of around 59, 237 units. However, the consumers in Vietnam are expected to show a higher preference for smaller fuel-efficient cars.
“Since vehicle tax structure and tariff policy are the key determinants for automotive sales performance, these need to be streamlined to offer long-term stability and support to the industry,” says the analyst. “Financial companies too must offer suitable car finance schemes to encourage vehicle uptake.” The OEMs in Vietnam should offer technical and quality support to the local automotive component industry and increase localisation content. This will help reduce car prices. Moreover, upgrading and improving the road infrastructure and parking facilities are expected to help resolve traffic congestion issues and encourage uptake of vehicles.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Public (train, air, public bus, ferry, taxi)
- Private (car, motorbikes, bicycle)
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