HANOI — Vietnam's thriving domestic automobile market is expected to plummet from this year's 100% sales growth rate to 20% next year, industry insiders say in a Vietnam News Agency report.
Domestic automobile joint ventures in the first eight months of the year sold 8,200 vehicles, double the number sold last year. Experts say that if automobiles sales continue along their current trend, an estimated 10,000 cars will be sold on the domestic market this year.
But the sudden increase in vehicle sales will not repeat itself next year, says Noaon Tuaan Vieat, head of theMotor Co. Vietnam sales department, who attributes current sales to the sudden increase in cars bought by enterprises facilitated by the country's new Enterprise Law.
Under the new law, the government is doing away with complicated paperwork required for new companies wanting to run transportation and tourism services. This has encouraged more people to participate in such businesses.
Additionally, the government now has a ban on using outdated and unsafe vehicles, stimulating new car sales, as well. The project to replace outdated “lambrettas” with 1,000 light trucks manufactured byMotor Corp.'s Vietnam JV is one example of this.
Some experts counter that even though the growth rate of the local automobile market may not repeat this year's figure, automakers do have the potential to boost their sales. Industry studies show that when imported vehicles are included in the figures, around 35,000 new vehicles have been sold in Vietnam annually since 1994.
Additionally, industry experts are calling on the government to boost the development of Vietnam's automobile industry, noting that the industry still is operating below capacity.
Automobile JVs here have produced an average of 10,000 vehicles annually since the first such enterprise was licensed 10 years ago, representing less than 10% of the capacity of the industry as a whole.Motor Vietnam currently is the largest enterprise, selling 2,886 vehicles in the year's first eight months. The company plans to sell another 4,500 vehicles before year's end, a marked increase over the modest 2,179 automobiles it sold in 1999.
Motor Co. sold more than 700 automobiles in the period, a two-fold increase over the same period last year. By the end of the year, the automaker hopes to sell more than last year's 9,961 units.