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1
VIETNAM AUTOMOBILE INDUSTRY REPORT Q2/2018
2
OICA Organisation Internationale des Constructeurs d'Automobiles (International Organisation of Motor Vehicle Manufacturers)
GDVC General Department of Vietnam Customs
GSO General Statistics Office
MOIT Ministry of Industry and Trade
UN Comtrade United Nations International Trade Statistics Database
VAMA Vietnam Automobile Manufacturer Association
VAMI Vietnam Association of Mechanical Industry
VIRAC Vietnam Industry Research And Consultancy
Abbreviations
3
Executive summary 4 2.2.1 Scale and characteristics 49
1. Business environment 6 2.2.2 Industry value chain 55
1.1 Macroeconomics 6 2.2.3 Industry position 57
1.2 Legal barrier 11 2.2.4 Spare parts 59
1.3 Impact of free trade agreements 22 2.2.5 Production 61
2. Industry overview 26 2.2.6 Consumption 65
2.1 World automobile market 26 2.2.7 Import 75
2.1.1 Spare parts 26 2.2.8 Automobile prices 78
2.1.2 Production 29 2.2.9 Distribution system 783
2.1.3 Consumption 32 3. Risks and Challenges 87
2.1.4 Import - export 38 4. Driving forces 93
2.1.5 Top typical countries 41 5. Planning and forecast 96
2.1.6 Top typical brands 45 6. Enterprises 103
2.2 Vietnam automobile market 49
Content
2017 continued to show the world automobile
market.
The world’s auto protectiopn worrkshops are
still located in three traditional areas, with the
car industry was born early in North America,
Western Europe and East Asia.
In 2017, the world’s atutomobile consumption
was estimated at 96,800,000 units, up 3.1%
from the same period last year.
Automobile exports in the world in 2017
continued to fall sharply and plunged the most
since 2012, when the total export value
reached only $ 629.49 billion.
The atutomobile industry in Vietnam today is
largely stopped at simple assembly. The
localization rate is around10%.
The newly promulgated Decree 116/2017 /
ND-CP on Production, Assembly and Trading
of Automobiles is expected to create new
opportunities In the development of
production activities of automobile companies
right in Vietnam instead of yielding to
imported cars.
After the first 3 months of 2018, production
and assembly of domestic cars reached 68.94
thousand vehicles, slightly up 7.81% over the
same period in 2017.
In the car assembly structure in Vietnam,
passenger cars always maintain a high
proportion of 60-70%.
4
Executive summary
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According to the Vietnam Association of
Automobile Manufacturers (VAMA), in the first
three months of 2018, the whole automobile
market achieved sales of 58,558 thousand
vehicles (including passenger cars, trucks, buses
and some other vehicles), down 2% over the
same period in 2017.
In the top 10 most sold cars in the first three
months of 2018, up to nine were domestically
assembled vehicles, ranging from passenger
cars of all sizes to crossovers, continued to take
the lead were the two new models from Toyota,
followed by two models of Mazda.
High concentration market share: In 2016,2017
and Q1/ 2018, more than 70% of VAMA's car
market share is held by Truong Hai, Toyota,
and Ford. In the first three months of 2018,
Truong Hai remained its position - the largest
holding company with 42.7% market share.
According to VIRAC estimates, the car
ownership per 1,000 people in Vietnam in 2016
(31 cars) is still low compared to other
countries in the region as well as in the world.
According to General Department of Vietnam
Customs, in the first 3 months of 2018, the
country imported 4,217 cars of all types, total
import value was only USD 118.4 million.
Compared to the same period of 2017, imports
in the first 3 months of 2018 decreased 84% in
quantity, down 75.8% in value.
The impact from Decree 116 has led to a sharp
decline in the number of imported vehicles in
the first three months of the year in all familiar
markets.
In addition to the risks of policy, politics and
currency, the sector faces challenges in terms of
capital, technology, human resources,
supporting industries, government policies,
infrastructure and environmental pollution…
With a forecasted growth rate of 10-15% for
the period 2016 – 2020.
5
.
Executive summary
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1. Business environment
1.1 Macroeconomics
1.2 Legal barrier
1.3 Impact of free trade agreements
Content
7
Source: VIRAC, GSO
Source: VIRAC, GSO
1. Business environment
1.1 Macroeconomics
The country economic background in the first quarter of 2018 still
remained rising trend from 2017. Gross domestic product (GDP) in the
first quarter of 2018 is estimated to increase 7.38% over the same period
last year.
Consumer price index (CPI) in the first three months of 2018 has a
lot of changes.
GDP growth by Quarters, 2015 – Q1/2018
Monthly CPI fluctuations, 2015 – 3/2018
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1. Business environment
1.1. Macroeconomics
8
Source: VIRAC, GSO
According to the Nielsen Consumer Confidence Index, the consumer
confidence index of Vietnam in the forth of 2017 decreased 1 point,
compared with the previous quarter, reaching 115 points.
GDP per capita has grown significantly over the years. USDGDP per capita, 2013 - 2017
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Source: VIRAC, GSO
9
1. Business environment
1.1 Macroeconomics
Source: VIRAC, GSO
Market interest rates are stable since 2015.
VND/USD exchange rate, 2013-3/2018
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Lending interest rate and mobilizing interest rate, 2012-2017
%
Source: VIRAC, SBV
The VND/USD exchange rate was stable and continued to be supported by
the abundant supply of foreign currency and the State Bank of Vietnam
(SBV) continuously bought foreign currency reserves.
10
Level of urbanization, 2010 - 2017
Disposable income and household expenditures, 2008 – 2017f
Source: VIRAC, GSO
Source: VIRAC, GSO
Increase in income and purchasing power:
The increasing proportion of people living in urban areas has contributed
to the expansion of the auto market.
1. Business environment
1.1 Macroeconomics
VND million
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11
1. Business environment
1.1 Macroeconomics
1.2 Legal barrier
1.3 Impact of free trade agreements
Content
12
Strengthening the quality control of motorized vehicles:
1. Business environment
1.2 Legal barrier
Type of car
Maintenance cycle
Regulation of maintenance of means of transport
Source: VIRAC summarized Circular53/2014/TT-BCTVT
Vehicle load control:
Draft Law on Corporate Income Tax:
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To change the regulations on prices for special consumption tax calculation for imported automobiles of under 24 seats.
1. Business environment
1.2 Legal barrier
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14
The draft import tax applies to automobile parts
Source: VIRAC
Menu of goods Commodity code details Tax rate
1. Business environment
1.2 Legal barrier
If the current Most favored nation (MFN) import tariff is set at the WTO
commitment ceiling, it will remain the same as the current tariff, but if
lower, the increase will be equal to the committed ceiling.
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Segment Current SCTFrom 1/7/2016
- 31/12/2018
From
1/1/2018
1
2
3
4
5
6
7
8
Roadmap to apply special consumption tax on cars
Source: VIRAC summarized Circular165/2014/TT-BTC
1. Business environment
1.2 Legal barrier
Modification of import tax on CB Units from a number of countries:
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1. Business environment
1.2 Legal barrier
According to Decision No. 49/2011 / QD-TT, new cars, motorcycles assembled and imported must meet the emission standard of 4 (Euro 4).
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17
1. Business environment
1.2 Legal barrier
Decree No. 116/2017 / ND-CP of October 17, 1977 stipulating the conditions for production, assembly, import and business of warranty and
maintenance services of automobiles of various types and effective from the date of signing.
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18
1. Business environment
1.2 Legal barrier
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General provisions on car import business:
19
1. Business environment
1.2 Legal barrier
Conditions for car maintenance and warranty:
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1. Business environment
1.2 Legal barrier
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On November 16, 2017, Decree No. 125/2017 / ND-CP was promulgated on amending and supplementing a number of articles of the Government's
Decree No. 122/2016 / ND-CP dated September 1, 2016 about export tariffs, preferential import tariffs, list of commodities and absolute tariffs, mixed
taxes, import tax outside tariff quotas.
21
The Ministry of Transport has issued Circular No. 03/2018 / TT-BGTVT guiding the implementation of Decree 116 on technical safety and quality
control and environmental protection applicable to imported cars.
1. Business environment
1.2 Legal barrier
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1. Business environment
1.1 Macroeconomics
1.2 Legal barrier
1.3 Impact of free trade agreements
Content
23
WTO – Increasing competition in the industry.
No. Unit
MFN tariff at
the time of
accession(%)
Commitment rates in the WTO
When
joining (%)Final (%)
Duration of
implementatio
n (since
accession)
1
2
3
a)
b)
c)
Roadmap for WTO tariff reductions for complete cars and auto parts
imports
Source: VIRAC
1. Business environment
1.3 Impact of free trade agreements
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AFTA, ASEAN + 3 – Vietnam is in danger of becoming a market for foreign car consumption.
AFTA 2008 - 2010 2011 2012 2013 2014 2015 2016 2017 2018
Tax rate (%)
1. Business environment
1.3 Impact of free trade agreements
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CPTPP - If not a member of CPTPP, Vietnam's automobile industry will hardly survive after 2018, when it must compete directly with Thailand, Indonesia.
Regional Comprehensive Economic Partnership (RCEP) – When participating, Vietnam will have a great opportunity to Japan support development of
processing industry, manufacturing in general and the automotive industry in particular.
1. Business environment
1.3 Impact of free trade agreements
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2. Industry overview
2.1 World automobile market
2.1.1 Spare parts
2.1.2 Production
2.1.3 Consumption
2.1.4 Import - export
2.1.5 Top typical countries
2.1.6 Top typical brands
Content
27
2. Industry overview
2.1 World automobile market – 2.1.1 Spare parts
Country RankingProportion
(%)
Import structure of automobile components and
accessories, 2017e
Source: VIRAC, UN ComtradeSource: VIRAC, UN Comtrade
USD billion
Import of world car components, 2010 - 2017e
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Country RankingProportion
(%)
Export structure of automobile components and
accessories, 2017e
Source: VIRAC, UN Comtrade
In the 1999s, except for Japan, other East Asian countries took a modest place in
the auto production of the global automotive production network.
2. Industry overview
2.1 World automobile market – 2.1.1 Spare parts
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2. Industry overview
2.1 World automobile market
2.1.1 Spare parts
2.1.2 Production
2.1.3 Consumption
2.1.4 Import - export
2.1.5 Top typical countries
2.1.6 Top typical brands
Content
30
Structure of world production by vehicle, 2017
Source: VIRAC, OICA
Million Units
Source: VIRAC, OICA
2. Industry overview
2.1 World automobile market – 2.1.2 Production
2017 continues to show the growth of world’s
automobile car market.
Production of cars in the world, 2010 - 2017
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Source: VIRAC, OICA
Today, the world's production of car automobiles is still in place in three traditional areas, with the early auto industry in North America, Western Europe
and East Asia. While Western Europe with Germany's largest production - the first place to bring cars into mass production in the late 19th century,
2. Industry overview
2.1 World automobile market – 2.1.2 Production
Production structure by region, 2016 - 2017
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2. Industry overview
2.1 World automobile market
2.1.1 Spare parts
2.1.2 Production
2.1.3 Consumption
2.1.4 Import - export
2.1.5 Top typical countries
2.1.6 Top typical brands
Content
33
Source: VIRAC, OICA
Million Units
2. Industry overview
2.1 World automobile market – 2.1.3 Consumption
Global car sales in 2017 were 96.8 million vehicles, up 3.1%
from 2016,
World car consumption by type, 2010 - 2017
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Top 10 World’s best-selling cars , 2017
34
Million Units
Source: VIRAC, OICA
2. Industry overview
2.1 World automobile market – 2.13 Consumption
Although the global market is growing, it is uneven across regions.
Consumption of car in the world, 2013 - 2017
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2. Industry overview
2.1 World automobile market – 2.1.3 Consumption
Source: VIRAC, OICA
Thousand UnitsCar consumption of ASEAN Automotive Federation members (AAF), 2017
36
Source: VIRAC, OICA
Source: VIRAC, OICA
According to 2015 statistics, America and Asia -
Oceania is the largest car consumption region in the
world with a share of 32.9% and 33.5%, with major
contributions from the United States and China.
Consumption in the US will reach 17.47 million units, a record high. Since 2001, US
household finances have improved steadily as the economy grew to its highest level in a
decade,
2. Industry overview
2.1 World automobile market – 2.1.3 Consumption
The number of vehicles used in the world, 2010 - 2015e
Structure of vehicle usage by area, 2015
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Number of vehicles per 1,000 people in some typical countries, 2015
* Average automobile ownership: 182 units/ 1,000 people
Source: VIRAC, OICA
2. Industry overview
2.1 World automobile market – 2.1.3 Consumption
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2. Industry overview
2.1 World automobile market
2.1.1 Spare parts
2.1.2 Production
2.1.3 Consumption
2.1.4 Import - export
2.1.5 Top typical countries
2.1.6 Top typical brands
Content
39
Source: VIRAC, UN Comtrade
Million Units
2. Industry overview
2.1 World automobile market – 2.1.4 Import - export
Automobile exports in the world in 2017 fell the most since 2012.
Exporting cars in the world, 2010 – 2017e
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Source: VIRAC, UN ComtradeSource: VIRAC, UN Comtrade
Top largest exporters of automobiles are Germany, Japan, Mexico, Canada...
2. Industry overview
2.1 World automobile market – 2.1.4 Import - export
Structure of automobile exports by country, 2017e Import structure of cars by country, 2017e
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2. Industry overview
2.1 World automobile market
2.1.1 Spare parts
2.1.2 Production
2.1.3 Consumption
2.1.4 Import - export
2.1.5 Top typical countries
2.1.6 Top typical brands
Content
42
China - The world's largest car consumption market
US - The market continued to grow for 7 years
Place Country 2016 2017
1
2
3
4
5
6
7
8
9
10
Top the largest automobile consumption countries by volume,
2017
Source: VIRAC, OICA
2. Industry overview
2.1 World automobile market – 2.1.5 Top typical countries
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Japan – Growing after three consecutive years of decline
Germany - Europe's largest automobile market and considered the birthplace of the automobile industry
India - Emerging markets.
UK
Brazil
2. Industry overview
2.1 World automobile market – 2.1.5 Top typical countries
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44
France
Italia
Canada – Strong growth thanks to exports benefited from increased demand in the US
2. Industry overview
2.1 World automobile market – 2.1.5 Top typical countries
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45
2. Industry overview
2.1 World automobile market
2.1.1 Spare parts
2.1.2 Production
2.1.3 Consumption
2.1.4 Import - export
2.1.5 Top typical countries
2.1.6 Top typical brands
Content
46
Source: VIRAC, OICA
Volkswagen (VW for short)
Toyota Môtôr Corporation
Renault-Nissan
Hyundai-Kia
2. Industry overview
2.1 World automobile market – 2.1.6 Top typical brands
Unit: Thousand Units
Top 10 leading producers in the world, 2016
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General Môtôrs Corporation
Ford
FCA
Honda Motor
Psa
Suzuki
2. Industry overview
2.1 World automobile market – 2.1.6 Top typical brands
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48
2. Industry overview
2.1 World automobile market – 2.1.6 Top typical brands
Source: VIRAC, Brand Finance
Billion USD
Top ten world’s most-priced cars published by Brand Finance, 2017
49
2. Industry overview
2.2 Vietnam automobile market
2.2.1 Scale and characteristics
2.2.2 Industry value chain
2.2.3 Industry position
2.2.4 Spare parts
2.2.5 Production
2.2.6 Consumption
2.2.7 Import
2.2.8 Automobile prices
2.2.9 Distribution system
Content
50
2. Industry overview
2.2 Vietnam automobile market – 2.2.1 Scale and characteristics
Market segments
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2. Industry overview
2.2 Vietnam automobile market – 2.2.1 Scale and characteristics
Source: VIRAC, GSO Source: VIRAC, GSO
The number of enterprises operating in automobile assembly and assembling sector in 2016 is 65 enterprises, increasing 22.64% in comparison with
2015.
Number of employees, 2010-2016Number of businesses, 2010-2016
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52
2. Industry overview
2.2 Vietnam automobile market – 2.2.1 Scale and characteristics
Source: VIRAC, GSOSource: VIRAC, GSO
VND billion
With the increasing disposable income of the people, the rising middle class has led to a growing demand for cars and used cars.
Turnover of automobile manufacturing and
assembly, 2010 – 2016
Turnover of automobile wholesaling and retailing,
2010 – 2016
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VND billion
53
Source: VIRAC, VAMA
2. Industry overview
2.2 Vietnam automobile market – 2.2.1 Scale and characteristics
In the first three months of 2018, Truong Hai continues to be the largest
holding company, but has dropped to only 42.7% of total car
consumption in the country.
Vehicle consumption structure by business, Q1/2018
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The form of car assembly by the degree of complexity increases:
2. Industry overview
2.2 Vietnam automobile market – 2.2.1 Scale and characteristics
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2. Industry overview
2.2 Vietnam automobile market
2.2.1 Scale and characteristics
2.2.2 Industry value chain
2.2.3 Industry position
2.2.4 Spare parts
2.2.5 Production
2.2.6 Consumption
2.2.7 Import
2.2.8 Automobile prices
2.2.9 Distribution system
Content
56
2. Industry overview
2.1 Vietnam automobile market – 2.2.3 Industry value chain
Vietnam automobile industry value chain
Source: VIRAC, OICA, VAMA
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2. Industry overview
2.2 Vietnam automobile market
2.2.1 Scale and characteristics
2.2.2 Industry value chain
2.2.3 Industry position
2.2.4 Spare parts
2.2.5 Production
2.2.6 Consumption
2.2.7 Import
2.2.8 Automobile prices
Content
58
Source: VIRAC, OICA, GSO
Industry position of Vietnamese cars compared with the world in 2017
2. Industry overview
2.2 Vietnam automobile market – 2.2.2 Industry position
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59
2. Industry overview
2.2 Vietnam automobile market
2.2.1 Scale and characteristics
2.2.2 Industry value chain
2.2.3 Industry position
2.2.4 Spare parts
2.2.5 Production
2.2.6 Consumption
2.2.7 Import
2.2.8 Automobile prices
2.2.9 Distribution system
Content
60
The automobile industry in Vietnam today is largely stopped at simple
assembly. The localization rate is about 10%.
2. Industry overview
2.2 Vietnam automobile market – 2.2.4 Spare parts
Source: VIRAC, GDVC
Source: VIRAC, VAMA
USD billionImport of car accessories, 2010 – Q1/2018
Localization rate of some countries in the region, 2016e
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61
According to General Department of Customs, in the first three
months of 2018, Vietnam spent 738.9 million USD dollars.
Import of auomobile spare parts by countries, Q1/2016-Q1/2018
Import structure of automobile spare parts, Q1/2018
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2. Industry overview
2.2 Vietnam automobile market – 2.2.4 Spare parts
Source: VIRAC, VAMA
Source: VIRAC, VAMA
USD million
62
2. Industry overview
2.2 Vietnam automobile market
2.2.1 Scale and characteristics
2.2.2 Industry value chain
2.2.3 Industry position
2.2.4 Spare parts
2.2.5 Production
2.2.6 Consumption
2.2.7 Import
2.2.8 Automobile prices
2.2.9 Distribution system
Content
63
Source: VIRAC, GSO, VAMA
Source: VIRAC, THACO
Thousand units
Thousand units
2. Industry overview
2.2 Vietnam automobile market – 2.2.5 Production
In the first three month of 2018, assembly production reached 68.94
thousand vehicles, up 7.81% over the same period in 2017.
Production output of THACO, 2010 - 2016
Production and assembly of automobiles in Vietnam, 2010 - 2017
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Source: VIRAC, GSO
Thousand units
Source: VIRAC, Ford
2. Industry overview
2.2 Vietnam automobile market – 2.2.5 Production
In the car assembly structure in Vietnam, passenger cars always maintain
a high proportion of 60-70%.
Production, assembly structure by vehicle type, 2010 – Q1/2018
Traffic panorama of Vietnam, 2016
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2. Industry overview
2.2 Vietnam automobile market – 2.2.5 Production
Expenses for research and development investment
At present, Vietnam's automobile industry has almost no
investment in research and development (R&D).Supplier Relevant units R&D Centre Factory
Source: VIRAC, THACO
Value chain assembly and production of Truong
Hai Auto
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2. Industry overview
2.2 Vietnam automobile market
2.2.1 Scale and characteristics
2.2.2 Industry value chain
2.2.3 Industry position
2.2.4 Spare parts
2.2.5 Production
2.2.6 Consumption
2.2.7 Import
2.2.8 Automobile prices
2.2.9 Distribution system
Content
67
Thousand units
Source: VIRAC, VAMA
In 2017, Vietnam car consumption was estimated at 272,250 thousand Units, down 10.3% from the same period last year.
2. Industry overview
2.2 Vietnam automobile market – 2.2.6 Consumption
General automobile consumption in Vietnam, 2006-2017
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The trend of car development in Vietnam is against the other countries in
the region.
Trends in automobile industry development in some Southeast Asian
countries, 2011 - 2016
Source: VIRAC, OICA, VAMA
2. Industry overview
2.2 Vietnam automobile market – 2.2.6 Consumption
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69
According to statistics from OICA and VAMA, car ownership per 1,000
people in Vietnam in 2016 (31 cars) is still low compared to other
countries in the region as well as in the world.
Unit
Source: VIRAC, OICA, VAMA
Number of cars per 100 households by urban and rural areas,
2004 – 2016e
Source: VIRAC, GSO
Unit
2. Industry overview
2.2 Vietnam automobile market – 2.2.6 Consumption
Number of cars owned per 1,000 people, 2016e
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Source: VIRAC, VAMA
2. Industry overview
2.2 Vietnam automobile market – 2.2.6 Consumption
Thousand units
The overall car market consumption in September continued to decline as the car market remained bleak and did not show any resurgence of growth
despite the decline in car sales in many segments.
Consumption of cars by vehicle type, 1/2016 – 12/2017
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Source: VIRAC, VAMA
Thousand units
2. Industry overview
2.2 Vietnam automobile market – 2.2.6 Consumption
In 2017, Vietnam consumed up to
272,750 car Units, down 10% compared
to 2016.
Consumption output by car origin, 1/2016 – 12/2017
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Ford EcoSport
Kia Morning
72
Top 10 best selling cars 2017
Toyota Vios
Ford Ranger
Mazda 3
Mazda CX-5
Source: VIRAC, VAMA
2. Industry overview
2.2 Vietnam automobile market – 2.2.6 Consumption
Kia Cerato
Honda City
Toyota Fortuner
Toyota Innova
Thousand unitsIn 2017, Toyota Vios continues to be the best-selling car on the market.
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Thousand Units
Source: VIRAC, VAMASource: VIRAC, VAMA
2. Industry overview
2.2 Vietnam automobile market – 2.2.6 Consumption
Consumption structure of VAMA members by region , 2015-2017Consumption vehicles of VAMA members by region, 2017
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Thousand units
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Source: VIRAC, VAMA Source: VIRAC, VAMA
2. Industry overview
2.2 Vietnam automobile market – 2.2.6 Consumption
High concentration market share: In 2016 and the first nine months of 2017, more than 71% of VAMA's vehicle consumption market share is held by
Truong Hai, Toyota, and Ford.
Vehicle consumption structure by business, 2016 Vehicle consumption structure by business, 2017
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Truong Hai Toyota
Distribution scale
Sales in 9M/2017
Brands
Marketing strategy
Promotion
Human resource training
Product advantage
Strength
Weakness
Direct competitive products
75
Competitive Analysis between Truong Hai and Toyota Vietnam by the end of September 2017
Source: VIRAC
2. Industry overview
2.2 Vietnam automobile market – 2.2.6 Consumption
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2. Industry overview
2.2 Vietnam automobile market
2.2.1 Scale and characteristics
2.2.2 Industry value chain
2.2.3 Industry position
2.2.4 Spare parts
2.2.5 Production
2.2.6 Consumption
2.2.7 Import
2.2.8 Automobile prices
2.2.9 Distribution system
Content
77
Source: VIRAC, GDVC
Thousand Units
Total imported cars in 2017 reached 97,213 thousand, worth $2.2
billion,
2. Industry overview
2.2 Vietnam automobile market – 2.2.7 Import
Import of automobiles in complete units, 2011-2017
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Source: VIRAC, GDVC
2. Industry overview
2.2 Vietnam automobile market – 2.2.7 Import
In 2017, Thailand remained the largest auto market for Vietnam with 38,244 vehicles, with an average price of 395 million VND/Unit.
Importing cars by country, 2015-2017
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Thousand units
79
2. Industry overview
2.2 Vietnam automobile market
2.2.1 Scale and characteristics
2.2.2 Industry value chain
2.2.3 Industry position
2.2.4 Spare parts
2.2.5 Production
2.2.6 Consumption
2.2.7 Import
2.2.8 Automobile prices
2.2.9 Distribution system
Content
80
Country< 2,000
cc
2,000 -
3,000 cc
> 3,000
cc
10 - 16
seats16 seats Pick-up
Import tax on cars by country (%), 12/2016
Source: VIRAC, MOIT
Source: VIRAC
The price of cars in Vietnam is 1.2 to 1.8 times higher than that of other
countries in the region and in the world, depending on the category.
USD thousand
2. Industry overview
2.2 Vietnam automobile market – 2.2.8 Automobile prices
Automobile prices comparing Vietnam with other countries, 6/2017
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List of taxes applicable on a car in Vietnam: Fees to be paid when wheeled on the road:
Source: VIRAC
2. Industry overview
2.2 Vietnam automobile market – 2.2.8 Automobile prices
Price of vehicle according to the cost structure of the consumer must bear
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It can be seen that as of December, 2017, prices of cars in Vietnam are
tending to decrease compared to the end of September.
82
VND million
2. Industry overview
2.2 Vietnam automobile market – 2.2.8 Automobile prices
Source: VIRAC
Price movements of some major vehicles, 6/2013 - 12/2017
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2. Industry overview
2.2 Vietnam automobile market – 2.2.8 Automobile prices
Source: VIRAC
Car type
(Capacity)
Former tariff, prior to 1/1/2018
Original price Import tariff SC tariff VAT
Corporate
income tax Local price
Imported car prices from ASEAN before 1/1/2018, assuming an original price of 100
Car type (Capacity)
Former tariff, prior to 1/1/2018
Original
price
Import
tariff SC tariff VAT
Corporate
income
tax Local price
Deduction
level
Source: VIRAC
Imported car prices from ASEAN after 1/1/2018, assuming an original price of 100
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2. Industry overview
2.2 Vietnam automobile market
2.2.1 Scale and characteristics
2.2.2 Industry value chain
2.2.3 Industry position
2.2.4 Spare parts
2.2.5 Production
2.2.6 Consumption
2.2.7 Import
2.2.8 Automobile prices
2.2.9 Distribution system
Content
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Automobile brands in Vietnam often invest their own distribution system or
cooperate with dealers to bring their products to customers.
2. Industry overview
2.2 Vietnam automobile market – 2.2.9 Distribution
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In 2017, the volatile auto market also affected the business of retail distribution.
2. Industry overview
2.2 Vietnam automobile market – 2.2.9 Distribution
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3. Risks and Challenges
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Risk factors
Policy risk
Political risk
Source: VIRAC, Yahoo Finance
Exchange rate risk
3. Risks and Challenges
VND/CNY exchange rate, 1/2016-12/2017
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The car manufacturing and assembly industry faces many challenges
Low localization rate
Direct competitors
Potential opponents
3. Risks and Challenges
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Capital and technology
Not high human resources
Business information system
3. Risks and Challenges
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Government policies
Traffic confrastructure
US Dollars/barrel
Source: VIRAC, World Bank
3. Risks and Challenges
Oil price action World crude oil, 2011 - 2017
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Impact on environmental pollution
Source: VIRAC, World Resources Institute
3. Risks and Challenges
Structure by source of CO emission to the environment
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The challenge coming from integration
Market dominance of imported cars
The transfer of the production and assembly of cars to Thailand
4. Driving forces
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4. Driving forces
Content
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Prospect of automobile consumption in Vietnam
Demand for automobile consumption in Vietnam continues to grow relatively when compared with other markets in the region.
Roadmap for tax reduction:
Infrastructure - traffic is improving:
Economic development
4. Driving forces
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Size and quality of population
Low interest rates, stability and growth in consumer lending are driving
forces for auto industry growth.
Source: VIRAC, NFSC
Source: VIRAC, GSO
VND trillion
4. Driving forces
Outstanding consumer loans, 2012 - 2016
Population pyramid, 2016
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5. Planning and forecast
Content
98
2020 2025 Năm 2030
Production output of domestic
vehicles (pcs)Growth rate (%/year)
2020 2025 2030 to 2015 2016-2020 2021-2030
Target Unit 2020 2030
Decision No. 1211 / QD-TTg approving the master plan for development of
Vietnam's automobile industry to 2020 with a vision to 2030.
Expected volume of domestic assembled vehicles
compared to total domestic demand (%)
Estimated vehicle output and growth rate of the yearExpected to export complete vehicles and spare parts
Source: VIRAC, Decision No.: 1211/QD-TTg
Source: VIRAC, Decision No.: 1211/QD-TTgSource: VIRAC, Decision No.: 1211/QD-TTg
5. Planning and forecast
5.1 Planning
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2020 2025 2030Supporting industry objectives:
Oriented development
Rate of localization by value over years
Source: VIRAC, Decision No.: 1211/QD-TTg
5. Planning and forecast
5.1 Planning
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5. Planning and forecast
5.1 Planning
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2018 is about to mark technological transforms and regional market
changes.
5. Planning and forecast
5.2 Forecast – 5.2.1 World forecast
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By the end of 2017, car makers was competitively offering cheap prices and high-end vehicles are expected to bloom in 2018.
Truck and specialized vehicles segments seize huge potentials to develop in 2018 thanks to:
5. Planning and forecast
5.2 Forecast – 5.2.2 Domestic forecast
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Domestic vehicles have the advantage and are expected to rise again
Source: VIRAC
Thousand Units
5. Planning and forecast
5.2 Forecast – 5.2.2 Domestic forecast
Forecast of car consumption in Vietnam, 2016 - 2020f
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6. Enterprise
Content
Vina mazda Kia motors Peugeuot
Mazda 3 Kia morning Peugeot 208
Mazda 6 Kia Cerato Peugeot 408
Mazda Cx5 Kia Sorento
Peugeot
3008
THACO - Truck THACO - Bus
Truck Couch
Some typical models of Truong Hai AutoOverview of Truong Hai Auto
6. Enterprise
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6. Enterprise
Some financial indicators of Truong Hai Auto
Indicator (VND billion) 2014 2015 2016
Evaluating Truong Hai Auto
Business strategy of Truong Hai Auto Sales and share of Truong Hai Auto, 2013 – 9M/2017
Currently, business strategy of Truong Hai is applied separately for different
product lines:
From 2013 to 2016, THACO set a record when sales and share consecutively
increased,
Source: VIRAC
Source: VIRAC
Unit
97
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6. Enterprise
The strategy of Toyota Vietnam
Overview of Toyota and its subsidiary in Vietnam Typical models
In the first nine months of 2017, TMV sold 43,832 vehicles; market
share remained at 23.7%.
Sales (volume) and market share of Toyota Vietnam 2013 – 9M/2017
Camry Corolla
Fortuner Innova
Vios Hiace
* Sales does not include Lexus
Source: VIRAC
Unit
98
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6. Enterprise
Overview of Lexus and its subsidiaries in Vietnam Typical models
Lexus is the exclusive luxury car brand of Toyota Motor Corporation was
born in 1989.
Sales (output) of Lexus Vietnam2014 – 9M/2017
Lexus LS 460L Lexus LX 570
Lexus GS 350 Lexus GX 460
Lexus ES 350 Lexus RX 350
Strategy of Lexus Vietnam
In the Vietnamese market, some Lexus vehicles have not yet achieved sales
as expected,
Source: VIRAC
Unit
101
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6. Enterprise
Overview of Ford and its subsidiary in Vietnam Typical models
Sales and share of Ford in the first nine months of 2017 continued to
stabilize at 11.6%, ranking third in the association VAMA.
Sales (volume) and market share of Ford Vietnam 2013 – 9M/2017
Ecosport Transit
Fiesta Ranger
Competitive strategy
Investment strategy on people
Ford Vietnam’s strategy
Source: VIRAC
Unit
99
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6. Enterprise
Overview of Honda and its subsidiary in Vietnam Typical models
In the first nine months of 2017, Honda sold 9,756 units, representing
5.3% of the total market share.
Sales (volume) and market share of Honda Vietnam2013 – 9M/2017
City CR-V
Civic Accord
Honda Vietnam's strategy
One of the business strategies of Honda Motor Vietnam is to provide products
with advanced engine technology, durability and fuel economy,
Source: VIRAC
Unit
100
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6. Enterprise
Overview of Mercedes-Benz and its subsidiary in Vietnam Typical models
In the first nine months of 2017, sales of Mercedes-Benz Vietnam
increased impressively (21% compared with the same period in 2016,
reaching 4,940 vehicles)
Sales (volume) of Mercedes - Benz Vietnam2013 – 9M/2017
C – Class A – Class
E – Class GLE/GLS
S – Class V - Class
Strategy of Mercedes - Benz Vietnam
Mercedes-Benz Vietnam strives to take care of its customers.
Source: VIRAC
Unit
102
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6. Enterprise
Overview of Hino Motors and its subsidiary in Vietnam Typical models
For the first nine months of 2017, Hino sales reached 2,786 Units, down 1%
from the same period of 2016 and the market share was only 1.5%
Sales (volume) and market share of Hino Motor Vietnam 2013 – 9M/2017
Light truck Medium truck
Heavy truck
The strategy of Hino Motors Vietnam
Competing by quality:
Marketing strategy:
Growth prospects:
Source: VIRAC
Unit
103
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6. Enterprise
Overview of Isuzu and its subsidiary in Vietnam Typical models
In the first nine months of 2017, Isuzu showed a comeback with 5,126
units, up 5% from the same period of 2016, with a market share of 2.8%.
Sales (volume) and market share of Isuzu Vietnam 2013 – 9M/2017
N-series F-series
Q-series Đầu kéo
Isuzu Vietnam’s strategy
Isuzu's brand strategy and customer acquisition service:
Source: VIRAC
Unit
104
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REPORT DISCLAIMER
REPORT DISCLAIMER
This document has been prepared in good faith on the basis of information available at the date of publication without any independent verification.
VIRAC has produced this report for private circulation to professional clients only. All information and statistical data herein have been obtained from
sources we believe to be reliable and made to ensure the accuracy of the contents of the pages of the report at the time of preparation. Such information
has not been independently verified and VIRAC makes no representation or warranty, whether express or implied, of any kind with respect to the
document and its contents, information and materials. The content found in this report is proprietary to VIRAC and is provided solely for your personal
and non-commercial use. You agree that you will not use this report for any purpose that is unlawful and that you will not reproduce the report or
redistribute it outside your organisation, or place it on a website for public access without the express written permission of VIRAC.
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Email: [email protected] | Tel: +84 463289520
102
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