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What will the automobile market be like in 2019?

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With the predicted recovery of car imports, the Vietnamese automobile market in 2019 is expected to heat up.

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The market experienced two periods in 2018: it was gloomy in the first half of the year because of strict regulations in Decree 116, and brighter in the second half, when problems could be fixed. The bustling market is expected to continue in 2019.

The market performance in the last few years shows that car sales depend on changes of policies. 

In 2017, for example, the purchasing power dropped sharply because buyers delayed their purchase plans, hoping that car prices would decrease after the tariff cut.

In the first months of 2018, the sales were still unsatisfactory because importers could not satisfy the requirements stipulated in Decree 116. And once the problems were solved, the sales recovered quickly.

According to the General Department of Customs (GDC), Vietnam imported 11,000 cars in September, 12,400 in October and 12,300 in November. The the total number of cars imported in the three months reached 35,700, higher than the total number of cars imported in the eight months before.

The sales of domestically assembled cars also depended on policies. Domestic automobile joint ventures saw their sales soar in the first half of 2018 because of the absence of imports. Meanwhile, in the second half of the year, once more imports arrived, the sales gap between domestically made and imported cars narrowed.

A report of VAMA showed that in the first six months of 2018, the sales of domestically assembled cars rose by 10 percent, while CBU imports decreased by 49 percent compared with the same period 2017. By the end of November 2018, the sales of domestically made products had increased by 11 percent, while imports decreased by 14 percent.

Opportunities and challenges in 2019

With a series of FTAs signed and under negotiations, analysts believe that car buyers would be able to buy cars at more reasonable prices.

In 2019, CBU imports from ASEAN countries will continue to be competitive thanks to ASEAN Trade in Goods Agreement (ATIGA).

With the tariff cut to zero percent, the prices of the imports from ASEAN countries are between VND300-500 million, affordable to more Vietnamese. 

Thoi bao Kinh Te Vietnam quoted some experts as reporting that the sales of popular and mid-end cars in 2019 may increase by 20 percent.

Meanwhile, the EU-Vietnam FTA is also hoped to make luxury cars from Europe more affordable. Under the agreement, the import tariff on cars from Europe would be lowered step by step from 70 percent to zero percent within 10 years.

 

 

Source: VNN

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