Friday, February 22, 2008

Vietnam's auto market to grow 30% in 2008

Auto market to grow 30% at least in 2008: VAMA
15:48' 21/02/2008 (GMT+7)

VietNamNet Bridge – Dr Udo Loersch, Chairman of the Vietnam Automobile Manufacturers’ Association (VAMA), believes that the domestic car market will witness the impressive growth rate of 30% at least in 2008 following a successful year 2007.

VietNamNet Bridge briefs you on the conversation between Mr Udo Loersch and VnMedia’s reporter.

2007 is really a successful year for domestic automobile manufacturers. What do you think are the main reasons behind the success?

Dr Udo Loersch, Chairman of the Vietnam Automobile Manufacturers’ Association (VAMA)

With 80,392 units sold in 2007, the market grew by 97% over 2006, of which cars and commercial vehicles saw the biggest growth rates at 128% and 129% respectively over 2006, while SUV/MPV also saw satisfactory growth rate at 46%.

There are many reasons that supported the market development: Vietnam’s national economy grew well by 8,5% in 2007, which helped the sales of commercial vehicles increase sharply. As the income of Vietnamese people has been increasing, cars have become affordable for many Vietnamese people, which has led to the high growth rate of car sales.

How do you think the automobile market will perform in 2008 and what kind of vehicles, MPV, sedans or pick-ups will sell the best?

We forecast the 30% growth rate in 2008 for cars, and 50% for commercial vehicles. However, the forecasts will only become true if we have stable tax policies, I mean the stable tax rates on CKD (complete knock down) and CBU (complete built unit) imports.

Mercedes Benz Vietnam has lowered the sale price of the C-Class. Do you think that the move will badly affect the brand name of Mercedes Benz, which has been known for luxury models?

There won’t be any effect on our brand name. We have been good in the management and successfully cut the production costs, which allows us to cut the sale price. We want to bring our luxury cars to more Vietnamese consumers, while still maintaining our position as the leading luxury car manufacturer in Vietnam. E-Class remains the highest-grade sedan model manufactured in Vietnam, while C-Class the best selling luxury model.

What would you say about the future of super cars, which have been imported massively into Vietnam in 2007 and early 2008, including Porsche, Lamborghini, Ferrari or Lotus?

I don’t think that the sales will be high. You won’t feel wonderful if you have a Ferrari but you can only drive it at the speed of 30-40 km/h on crowded roads. You can’t even drive fast on Highway No 1.

Mercedes Benz Vietnam has been granted the license to import cars to sell domestically, and other manufacturers are likely to be licensed in the time to come. What would you say about the competition between locally made cars and imported models?

Locally made cars under the form of CKD have the same quality as imported cars under the mode of CBU, but they are superior to imports because they have softer prices.

I think most of VAMA”s members will keep producing cars under the form of CKD as the main business. As for Mercedes Benz, we will increase the production capacity of E-Class, C-Class and Sprinters, and we may introduce some new models.

As for imports, we will introduce a wide range of products with S-Class, M-Class, GL-Class, CLS-Class, SLK-Class and R-Class.