Market Report, "Vietnam Autos Report Q4 2010", published

Aug. 9, 2010 - PRLog -- Vietnam's new vehicle market is characterised by fluctuating tariffs, which often make it hard to identify sustainable sales patterns. After there was evidence of tariff changes kicking in as sales for Q110 were down by 2%, despite an 80% increase in passenger car sales, total sales had returned to positive growth of 5% by the end of H110, although passenger car growth was lower at 29%. The MPV/SUV segment is still impacted by the higher special consumption tax with sales down 10%, while commercial vehicle sales were up just 2% y-o-y. While we believe that consumers appear to be adjusting to the new tax, as shown in the improvement during Q210, we have lowered our forecast for sales of domestically-produced vehicles to growth of 7.8%. This allows for some further growth in Q310, although from there on we believe the results of Q409, which were inflated by tax cuts, will be difficult to replicate.

Looking ahead, with vehicle imports set to surge when tariffs are removed under the ASEAN Free Trade Agreement (AFTA) in 2018, Vietnam's Ministry of Industry and Trade (MOIT) is looking to make the domestic industry competitive in the meantime. BMI sees an underdeveloped supplier segment as a major area for concern, which will be addressed through higher import tariffs on parts that can be made domestically. Higher rates will also be applied to vehicles imported as completely built units. In order to facilitate the sector's development, MOIT has proposed that investment projects for the auto industry should be given preference. However, BMI believes that there is a vicious circle in the Vietnamese industry in that carmakers are reluctant to invest in production without a well developed supplier base and suppliers will want to see growth potential in vehicle assembly before investing.

Fluctuating tariffs are still a factor in Vietnam's 12th position out of 14 markets in BMI's Business Environment Ratings for the autos sector in Asia Pacific. The highest score is for market risk, which stands at 85.0. Its country risk score has also risen from 49.8 to 51.5, taking its total score for risks to realisation of returns up to 68.2. Vietnam is still a country we would expect to see climb the ratings in the future, particularly if its vehicle tariff policy becomes more consistent.

Only four of the top 10 locally producing carmakers posted positive growth in H110, although the competitive landscape remained largely the same. Toyota Motor retained its lead with growth of 29%, down slightly from the 34% growth of Q110. Visuco again achieved the best growth of the top 10 manufacturers with a 72% rise in sales, up from 37% in Q110. Mekong, representing Fiat, Ssangyong and PMC, registered the worst sales with a 65% decline. We would expect to see Nissan Motor claim a greater share in future after beginning domestic production of its Grand Livina MPV to become more competitive.

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Report Table of Contents:

Executive Summary
SWOT Analysis
- Vietnam Autos Industry SWOT
- Political SWOT
- Economic SWOT
- Business Environment SWOT
Regional Market Overview
- Good Growth Prospects Up For Grabs In ASEAN Markets
Business Environment Ratings
- Table: Business Environment Ratings -- Auto Industry Asia Pacific
Industry Forecast Scenario
- Production & Sales
- Table: Vietnam Autos Sector - Historical Data And Forecasts
- Trade
- Table: Vietnam Autos Sector - Historical Data And Forecasts
- Economic Contribution
- Table: Vietnam Autos Sector - Historical Data And Forecasts
Competitive Landscape
- Market Overview
- Industry Developments
- Competitive Landscape
- Table: New Vehicle Sales By Top 10 VAMA Members, 2009 & 2008 (CBUs)
- Table: New Vehicle Sales By Top 10 VAMA Members, H109/10 (CBUs)
- Company Developments
- Commercial Vehicles
- Table: Vietnam - Commercial Vehicle Sales, 2006-Q110
Company Monitor
- Denso Eyes Local Content To Build On EM Success
Company Profiles
- Daewoo Motor (Vidamco)
- Mercedes-Benz Vietnam
BMI Methodology
- How We Generate Our Industry Forecasts
- Sources

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.