With stable economic growth rates ranked among the highest in Southeast Asia and the people’s ever-increasing living standards, Viet Nam is becoming a powerful magnet to foreign automobile manufacturers and exporters.

The car market in Viet Nam promises to be bustling because of the fast growing economy with the GDP being expected to rise at an average annual rate of more than 8 percent, said Kijeld Michael Olsen, General Manager of Motocare A/S, Kjaer Group – the sole supplier of Nissan-branded cars in Viet Nam. He said that the market’s demand will grow fast, by at least 15 percent a year in the coming time.

“A lot of Vietnamese people can afford to buy a car, and the number will increase very rapidly, even though the tax is still high and the infrastructure is not very good,” Olsen noted.

Motocare, although a newcomer joining the Vietnamese market in 2004, grew 300 percent in sales volume in a year from 2005 to 2006.

“You can say we are a small company, but we have grown a lot. We expect to double our sales here in Viet Nam in 2007,” the Motocare General Manager firmly said.

Sharing the same view with Olsen, Timothy D. Tucker, Ford Viet Nam Ltd. General Director, said Viet Nam’s economy and GDP will grow faster with an open market, and “all the industry will grow and it is the biggest benefit for Ford”.

According to the Viet Nam’s Automobile Manufacturing Association (VAMA), the total sales recorded by its 11 members in December reached 6,134 units, a rise of 62 percent from the previous month and up 27 percent compared to the same month in 2005.

The unexpected rise in sales volume of December helped raise the 2006 total sales by domestic automobile joint venture makers to 40,853 units, a slight year-on-year increase of 2 percent.

VAMA took off to a flying start, selling 4,722 cars in the very first month of 2007, a 152 percent up from the same period in 2006.

Other observers envisioned great prospects for the Vietnamese automobile market. The market’s consuming power, which is now staying at a humble level of around 40,000 units, will climb to 200,000-300,000 cars per annum, said Lee An Hwan, Deputy Director for Asia said.

Whether the above-said figure will be realised or not depends heavily on the Vietnamese Government’s policy, noted President, Nobuhiko Murakami of the Toyota Motor Viet Nam (TMV), the leading manufacturer which takes up 36.2 percent of the Vietnamese market’s share.

“However, individually, I think Viet Nam’s automobile industry has great potential due to its quick and stable economic growth,” Murakami said, adding, “If the auto industry develops, both FDI and local car makers will be able to exist and grow up further”.

Motocare General Manager Olsen also articulated his belief that the automobile market in Viet Nam will continue to grow, in both fields of car assembly and spare parts production.

Source: VNA, Photo: dantri