Auto sales in Vietnam last year touched an all-time high of 300,000 units, the Vietnam Automobile Manufacturers Association (VAMA) said in a report issued on Wednesday.
The report showed auto sales hit around 33,300 units last month alone, up 17% month-on-month and 13% year-on-year. Of the volume, there were some 22,840 passenger cars, 9,370 commercial vehicles, and 1,085 special-purpose autos.
Notably, sales of passenger cars shot up by 27% compared to the same period of 2015 while sales of other vehicles changed slightly.
The report said over 304,427 autos found buyers last year, up a staggering 24% over the year-ago period, with 182,347 of them passenger cars, up 27%, 106,347 commercial vehicles, up 25%, and 15,733 special-purpose automobiles, up 33%.
VAMA said 228,964 domestically-assembled cars were delivered to customers, up a hefty 32% year-on-year, and 75,463 imported completely built-up (CBU) autos were sold, an increase of a mere 5%.
Among VAMA members, Truong Hai Auto Joint Stock Company (Thaco) took the lead with its sales totaling 112,847 units, accounting for 41.5% of the market. Toyota Vietnam came second with 57,036 units sold, 21%, and Ford Vietnam third with 29,011 autos, 10.7%.
The results went beyond expectations of automakers. Early last year, VAMA forecast an annual growth rate of around 10-15% in sales in all of 2016.
Backed by the higher-than-expected results, auto makers may think of raising the ratio of local content. Vietnam’s auto market has registered strong growth over the past two years as the demand for private car ownership has leapt sharply.
VAMA predicted auto sales would grow around 10% this year. In 2015, auto sales hit a record high of 245,000 units.
The prospect of the market is good but the industry is still having difficulty attracting foreign investors to come to the nation to produce parts for automakers. Moreover, import duties on CBU vehicles from ASEAN countries are down to 30% this year from last year’s 40% and to zero in 2018. By then, auto parts producers may see no appetite to set up shop in Vietnam.
People are concerned that Thailand and Indonesia would become exporters of CBU vehicles to the domestic market as Vietnam is still far behind neighboring countries in terms of supporting industries and production costs.