The largest French carmaker wants to turn Vietnam into an ASEAN factory

Groupe PSA with two famous brands Peugeot and Citroen is planning to set up a factory in Vietnam to export to all of Southeast Asia.

Peugeot 5008 competes with Mazda CX-5, Honda CR-V or Nissan X-Trail in Vietnam. Photo: Peugeot.

According to Paultan, Groupe PSA's factory in Vietnam will be operational from 2018 with a sales target of 70,000 units in 2020. This is the first step in the plan to turn Vietnam into a French car manufacturing center in Southeast Asia.

Previously, a report in June by BMI Research (part of Fitch Group) also confirmed that Groupe PSA with two brands Peugeot and Citroen will promote production in Vietnam to export throughout Southeast Asia.

Groupe PSA is currently the largest car manufacturer in France and the second largest in Europe. Its subsidiaries include: Peugeot, Citroen, DS Automobiles, Opel and Vauxhall Motors.

Among these, Peugeot is the most familiar name as it is still officially distributed in Vietnam through Truong Hai. However, Peugeot's monthly sales are quite sluggish, reaching an average of only about 20 cars/month, according to the first 6-month report from VAMA (Vietnam Automobile Manufacturers and Assemblers Association).

As for Citroen, this brand is actually not too unfamiliar to the Southern market as it had an official dealer and showroom in Ho Chi Minh City before 1975. However, Citroen quickly “withdrew” silently. In 2011, this car company returned to Vietnam but did not make much of an impression.

Up to now, French cars in Vietnam in general and brands such as Peugeot and Citroen in particular have had difficulty winning over consumers. Experts say that the price is higher than that of popular cars but lower than that of luxury cars, along with the unfamiliarity of the brand and the small dealer network, which are the biggest weaknesses of French cars compared to their Japanese, Korean or German competitors.

However, great opportunities may still open up for the "talents" who come later, as the car ownership rate in Vietnam remains the lowest in the region, according to a survey by the Pew Research Center.

In addition, to promote the domestic automobile industry, the Ministry of Industry and Trade has recently proposed not to impose special consumption tax on the value of domestically created components. This is considered an unprecedented incentive for joint ventures and enterprises in the supporting industry if approved.

According to Zing