Vietnam New Vehicle Sales Up 37%

July 10, 2002 Hanoi; In a story by Jason Folkmanis Bloomberg News reported that Vietnam's new auto sales rose 37 percent in the first half of the year, boosted by demand for cars made by Ford Motor Co. and market leader Toyota Motor Corp.

Sales of new vehicles made in Vietnam climbed to 11,947 vehicles in the first six months of 2002 from 8,707 units in the year-earlier half, according to figures from the Vietnam Automobile Manufacturers' Association. In June alone, sales rose 34 percent to 2,227 vehicles from 1,658 in June 2001.

Vietnamese government officials said last month they expect new auto sales to reach as many as 100,000 annually by 2010 and 300,000 by 2020, as incomes in the country climb and road networks improve. Vietnam has 11 foreign-invested auto manufacturers.

"I wouldn't be surprised if the overall growth rate this year exceeds 40 percent," said Dietrich Doerp, director of technology, sales and marketing at Mercedes Benz Vietnam. "It looks like the market will be close to 30,000 vehicles this year."

Last year, almost 20,000 new vehicles were sold in Vietnam. There were also more than 22,000 vehicles imported into the country last year, according to Vietnam's Ministry of Industry.

As automakers' capacity and technological capabilities increases over the coming decade, Vietnam wants to replace almost all imports with vehicles produced within the country, Do Huu Hao, director general of Vietnam's Institute for Industry Policy and Strategy, said last month.

Toyota's strategy

Sales at Toyota's Vietnam unit rose 14 percent to 3,202 vehicles in the half, giving it a market share of 26.8 percent. The company's Corolla car, priced at around $27,500, has been its strongest model in Vietnam, said Toyota Vietnam President Mutsuhiko Ono.

"We are selling Corollas to both private and state companies," Ono said. "We expect the market for this price range in Vietnam will continue to grow."

The Vietnam unit of South Korea's Daewoo Motor Co. saw a 43 percent rise in sales to 1,900 vehicles in the first half, giving it a 15.9 percent market share at the end of June. General Motors Corp. has agreed to buy Daewoo Motor's Vietnam unit as part of its purchase of some of the insolvent automaker's assets.

Sales by Ford Motor Co.'s Vietnam unit almost tripled to 1,588 vehicles in the first half, securing third place in the market with a 13.3 percent share. Fourth-place Mercedes Benz, a unit of DaimlerChrysler AG, saw sales rise 70 percent to 1,178 vehicles in the half, giving it a 9.9 percent market share.

"We originally had a target of 2,020 vehicles for the year but now we expect to exceed 2,500," said Doerp of Mercedes-Benz. "Traditionally we sell more vehicles in the second half of the year."