In April 2019 when Decree No. 20 took effect, the registration fee for pickup trucks and Van cars officially tripled compared to the former level.
According to this regulation, pickup trucks with 5 seats or less will pay the first registration fee with the rate of 60% of the first registration fee for cars of 9 seats or less instead of 2%. With this rate, the registration fee of pickup trucks in 2019 increased to 6 - 7.2%. In which, 7.2% is applied in Hanoi, creating significant changes in the automobile market.
Instead of ending the contract in September 2019, Tan Chong would continue to have the right to import and distribute Nissan vehicles in the Vietnamese market until 2020 under an extended contract. Thus, the joint venture cooperation between these two partners in Vietnam market was extended for one more year, from September 10, 2019 to September 30, 2020.
After the agreement, Tan Chong continued to expand its operations, though the business results of the Nissan brand in Vietnam market were not very satisfactory. It was reported that Tan Chong has also been expanding its car assembly activities in Da Nang and trying to bring another Chinese car brand into the Vietnamese market.
At the end of July, Thanh Cong Group launched TC Motor which will represent Thanh Cong Group in the field of automotive industry activities instead of the well-known Hyundai Thanh Cong. By changing this identity, Thanh Cong Group said it would manufacture and trade other brands besides Hyundai. Rumors has it that Thanh Cong will cooperate with some other automobile brands in Vietnam market. However, so far, there has been no official information.
TC Motor also had a successful year when it sold more than 63,000 cars under the Hyundai brand, one of the three brands with a largest market share in the Vietnamese automotive market.
Ford officially confirmed to stop assembling Ford Focus in Vietnam in August 2019. In fact, Ford Vietnam had stopped manufacturing this car model at Ford Hai Duong factory since June 2019. Ford's representative said: "This change of production plan is part of the regional strategy and aims to focus on the production of cars with high customer demand in Vietnam. Ford Vietnam is continuing to promote the development of locally assembled vehicles (CKD) in the future, to meet the increasingly strong needs of customers”.
After the “death” of Focus, Ford also confirmed the assembly of two models, Ford Tourneo and Escape. These two models have also been launched in the domestic market. However, only Tourneo has been sold while Escape will be sold early next year.
Imported complete built-up cars returned to Vietnam in the second half of 2018 and began to explode in 2019. According to the General Department of Customs, in the first 11 months of 2019, the number of imported complete built-up cars was over 135,200 units with the value of USD 2.91 billion, nearly doubled both in volume and value over the same period last year. In particular, most of the imported CBU cars was under-9-seat cars imported from ASEAN when the import tax was reduced to 0%.
Increase in import of CBU made the supply of CBU in Vietnam secure and grow sharply compared to 2018. The gap between imported and assembled vehicles has thus been narrowed.
The price of cars in 2019 bottomed out when carmakers and dealers simultaneously reduced prices to clear inventory and pick up new models. The trend of car price reduction started from August (July of the Lunar Calendar) and there has been no sign of stopping even though the market is at the busiest time.
Most popular car models including Toyota Vios, Fortuner, Wigo, Innova, Mazda CX-5, Mazda3 or Ford Everest, Ecosport are being discounted by tens of million dongs. Car prices continue to fall and tend to fall more dramatically as both automakers and dealers continuously announce incentive programs. The "hot" models such as Honda CR-V and Toyota Fortuner no longer have a price difference at the time of Tet, they even have discount from several tens to hundreds of million dongs.
The downward trend not only affects the popular car segment but also the luxury cars when dealers are under pressure from inventory. Prices for BMW, Audi, Mercedes - Benz, etc. have to be reduced by hundreds of million dongs. The price reduction comes from the competitive pressure of the 2019 auto market, which is very fierce in price competition. The reason is that the growth of the Vietnamese automobile market is not as expected, leading to a large inventory of car companies.
>>> 0% tariff on import cars: Vietnam automobile manufacturers to face challenges
Compiled by VietnamCredit