Imported car models that enjoy 0% tax for Vietnamese customers.

Taking advantage of the 0% import tax rate from 2018, many car manufacturers adjusted their business strategies, shifting from assembly to importing. This is considered a necessary condition for imported cars to become cheaper than they are now.

The new generation Honda Civic, CR-V, Toyota Fortuner, and many newcomers such as the Suzuki Celerio, Honda Jazz, and Toyota Avanza all originate from two markets with the highest localization rates for components in ASEAN.Thailand and Indonesia. These two countries also led in the volume of completely assembled cars imported into Vietnam in 2017.

According to experts' calculations, import taxes alone...down from 30% in 2017 toWith import duties reduced to 0% since 2018, car prices could potentially fall by around 23%. However, import management policies and individual manufacturer strategies may prevent prices from dropping as significantly as expected.

The following car models all share one thing in common: they are imported from ASEAN countries. Price variations may be a leverage to improve sales for some models, but they can also help increase the dominance of others.

A-segment hatchbackButMitsubishi Mirage,Suzuki Celerio, Toyota Wigo

With affordable prices, suitable for first-time car buyers and those using the car for ride-sharing services, the Kia Morning and Hyundai Grand i10 dominate the segment, but are now facing two formidable Japanese competitors.

In 2018, Celerio imported from Thailand and Wigo imported from Indonesia will enter the segment.The market has been booming in Vietnam over the past few years. Detailed pricing and delivery dates for both models are not yet officially available. Specifically, the automatic version of the Suzuki model is priced at 359 million VND by some dealerships. Its competitors, the Morning and Grand i10, are currently selling for 375-390 million VND, both automatic versions.

Brand advantage and resale value may not be the strongest weapons for Wigo to gain an advantage in the market.The budget segment, where price and affordable features are key factors influencing car buying decisions.Both Korean car models are assembled domestically.

C-segment sedanButHonda Civic

Considering the benefits from the 0% import tax since 2018, the expectation for the Honda Civic is a price reduction to reach a wider customer base, rather than a significant competitive advantage in terms of sales against its leading rival, the Mazda3. The current on-the-road price of the Civic is over one billion VND, a considerable difference compared to other domestically assembled models.

Facing strong competitors like the Mazda3 with its neutral design and competitive price (649-740 million VND) or the former king Toyota Altis (678-905 million VND) with its powerful brand, the Honda Civic needs more innovation, instead of just one version and a price point close to the D-segment as it currently is.

The strategies to boost sales are a difficult problem for Honda to solve in order to avoid conflicts of interest.The philosophy focuses on providing customers with a sporty experience, creating a distinct personality within a segment that is the Japanese automaker's strength.

C-segment crossoverButHonda CR-V

While not creating a large price gap compared to rivals like the Civic, the new generation Honda CR-V imported from Thailand possesses its own strengths to avoid being significantly outsold by the Mazda CX-5.

The Japanese automaker has yet to announce the detailed pricing for the new CR-V, with the top-of-the-line version costing nearly 1.1 billion VND. Meanwhile...The Hyundai Tucson, manufactured in Ninh Binh, is priced at 760-890 million VND, while the Nissan X-Trail, produced in Da Nang, is priced at 852-986 million VND. Mitsubishi has just announced the price of the locally assembled Outlander at 808-1,100 million VND. Leading the segment in sales in 2017, the Mazda CX-5 has new prices effective from January 2018 at 869-999 million VND.

7-seater D-segment SUVButToyota Fortuner, Ford Everest, Isuzu mu-X, Mitsubishi Pajero Sport

The 7-seater SUV segment in Vietnam is an uneven competition between the Indonesian-imported Toyota Fortuner and the rest, such as the Ford Everest, Mitsubishi Pajero Sport, and Isuzu mu-X imported from Thailand. Aside from the domestically assembled Kia Sorento, the 0% import tax advantage from 2018 is evenly distributed among these models. The Chevrolet Trailblazer, however, has yet to have an official price and launch date after its last appearance at the VMS 2017 exhibition.

The remaining key factor is each manufacturer's strategy, plus the tightening import policies of the regulatory authorities, which will determine how much the price of the cars will decrease. Cumulative sales figures up to November 2017 in this segment show that, in reality, price is not necessarily the deciding factor in the sales race.

Priced at 981-1,308 million VND, the Fortuner, with its strong brand, appears to have no rivals in its segment. The Isuzu mu-X, priced at 899-960 million VND, struggles at the bottom of the rankings.

Pickup trucks - 7 models

The pickup truck segment in Vietnam has boomed in recent years thanks to tax and fee incentives, practicality, and prices under one billion VND while offering features comparable to passenger cars.The car models distributed to Vietnamese customers are all imported from Thailand, and the price reduction is not significant because the import tax has been lowered from 5% to 0%.

Two American-branded pickup trucks, the Ford Ranger and Chevrolet Colorado, are dominating their Japanese rivals such as the Mazda BT-50, Toyota Hilux, Mitsubishi Triton, and Isuzu D-max. Nissan Navara has not released sales figures.

2018 was a particularly significant year for Vietnamese customers, especially regarding pickup trucks. Instead of focusing on how much the price would decrease, their greater concern stemmed from the Ministry of Industry and Trade's proposal to increase excise tax and registration fees on pickup trucks, applying the same rates as passenger cars with fewer than nine seats.If the above proposal goes into effect, pickup truck prices in 2018 are likely to increase rather than decrease.

Besides the names mentioned above, the Vietnamese automobile market in 2018 had many other ASEAN-imported car models that benefited from a 0% tax rate if they met the condition of a minimum 40% localization rate of components.

B-segment hatchback:Toyota Yaris, Mitsubishi Mirage,Honda Jazz (not yet available).

B-segment sedan: Suzuki Ciaz, Mitsubishi Attrage.

MPV: Toyota Avanza, Suzuki Ertiga.

D-segment sedanHonda Accord.

As for newcomers like the Toyota Avanza (a younger sibling of the Innova) and the Honda Jazz, their official prices and launch dates for 2018 have not yet been determined, partly because Decree 116/2017 tightened regulations on automobile imports, causing car manufacturers to take longer to bring vehicles into the country.

Thanh Nhan