New products continuously released, domestic cars reduced in price by hundreds of millions
The 2018 auto market promises to be very exciting, with a series of completed investment projects, launching many new car models, modern technology, reduced prices and fierce competition.
Big market
Mitsubishi Vietnam has started assembling the Outlander model, instead of importing it completely from Japan. This is the direction chosen by the company to expand and develop automobile production in Vietnam since 2018.
Mitsubishi plans to invest more than 200 million USD in its factory in Binh Duong and call on a number of foreign enterprises to invest in component production here, to achieve a localization rate of 40% in the near future.
Figures from the General Statistics Office show that GDP per capita in 2017 reached 2,385 USD. When per capita income reaches 2,000 USD, it is also the beginning of the monorization period. With a population of more than 93 million people and an average income that continues to increase, Vietnam is in the sights of major car brands in the world.
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In the near future, there may be more “big guys” in the automobile industry investing in production in Vietnam. Business sources said that an automobile joint venture between China and a major European brand, with a factory in Shanghai, is planning to invest in automobile assembly production in Vietnam, with a capital of up to 1 billion USD.
According to the above source, the current policies for developing the automobile industry are quite attractive, while the potential market is large and opens up export opportunities to ASEAN, which is the driving force behind this investor's intention to build a factory in Vietnam.
This brand, to date, has no base in Southeast Asia. Investing in Vietnam, will develop new car models, not yet available in the region, meeting European standards, but with a cheaper price than imported cars, competing with other brands.
Currently, Vietnam has 3 enterprises: Truong Hai, Hyundai Thanh Cong and Vinfast, which are investing heavily in domestic automobile production and assembly. With Mitsubishi, Toyota and some other enterprises joining the market soon, the automobile industry will certainly be bustling.
Mr. Kenichi Horinouchi, General Director of Mitsubishi Motors Vietnam, said that Vietnam is emerging as a major automobile market in Southeast Asia. This is the reason why Mitsubishi Motors decided to increase investment, expand factories, develop more dealerships, and assemble more car models to meet customer needs. Investing in manufacturing and assembling in Vietnam still has advantages, if there is a suitable direction. That is, manufacturing and assembling products that have not been developed in Southeast Asia, to meet domestic and export needs.Prices drop sharply
From 2018, there will be impressive breakthroughs in the automobile market in terms of sales. Vietnam will surpass Malaysia to rise to 4th place in the region, after Thailand, Indonesia and the Philippines. In the long term, it is very potential. It is estimated that the Vietnamese automobile market will reach sales of about 12 billion USD by 2030.
Therefore, it would be a mistake to ignore this market, while imported cars are facing difficulties, while domestically assembled cars have many advantages, said a representative of Mitsubishi Vietnam.
Compared to the version imported from Japan, the price of Mitsubishi Outlander assembled in Vietnam is reduced by 167-181 million VND, thanks to the difference between import tax on components and import tax on complete vehicles. Therefore, it has created a product with a competitive price in the current 5+2 SUV segment.
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With the new regulation, from January 1, 2018, large-scale automobile assembly manufacturing enterprises will have their import tax on all components reduced to 0%. This has helped enterprises reduce the retail price of assembled products by 12-15%.
If automobile manufacturing and assembling enterprises are given additional incentives of 0% special consumption tax on domestically purchased components; if component manufacturing enterprises are given reduced import tax on raw materials and input materials to 0%, the cost of domestically assembled cars will decrease. Domestic car prices will be cheaper than imported cars, attracting more investors.
At the end of March 2018, Truong Hai will inaugurate the Mazda Factory with a capacity of 50,000 vehicles/year. At the end of 2018, the Hyundai Thanh Cong Automobile Factory with a capacity of 40,000 vehicles will come into operation. Also at the end of 2018, Vinfast will inaugurate the Phase 1 Automobile Factory with a capacity of 100,000 vehicles/year, launch 2 new car models and receive orders from the beginning of 2019.
With this development, the automobile market will change. Domestically assembled cars will grow strongly in both scale and output. The risk of depending on imported cars and increasing trade deficit will be greatly reduced.
Enterprises said that many domestically produced and assembled car models with modern technology will appear, prices will decrease, service quality will improve and consumers will benefit.
