Product Trends in Vietnam
- In Vietnam, the automobile market is dominated by locally-assembled models due to strict tax measures on imported vehicles. Nearly all recently launched models are remodeled versions of existing products. One exception is the locally-assembled Ford EcoSport. Released in July 2014, the EcoSport isintended to take lead in the small SUV segment where there is little competition. Meanwhile, market-leader Toyota released the fully-remodeled Vios, Yaris and Corolla core passenger vehicles in 2014. In 2016, the Fortuner, is scheduled to be fully remodeled. Honda's City and Accord alsounderwent full-model change.
- Automobile market of the Vietnam is reaching the 200,000-unit level. Apart from growing market demand, tariffs on imported automobiles are scheduled to be abolished in January 2018 within ASEAN. As a result, product imports, primary from Thailand and Indonesia, are expected to expand and diversify in the future. The abolition of tariffs will certainly benefit Japanese, US and European automakers which have local factories in the region; however, it will possibly hamper operations of Korean manufacturers which lack large-scale production facilities in ASEAN.
- Currently, tariffs are imposed on all models regardless whether they are imported from Thailand or Korea, enabling Korean-made models to secure some competitiveness. However, their competitive edge will greatly decline once tariffs within ASEAN are abolished in 2018. For this reason, Kia is putting forth a plan to boost local assembly in Vietnam. Moreover, the Trans-Pacific Partnership free trade pact will abolish tariffs on Japan-made automobiles with an engine over 3.0L which is expected to improve competitiveness of the Lexus and other large engine models.
Contact us: info@inovev.com