Country Analysis Vietnam

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Vietnam, Automotive, Motorbike, Cars

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Country Analysis Vietnam

  1. 1. Suranjan Das<br />1<br />Vietnam Auto Market<br />Country Analysis<br />Suranjan Das<br />Two wheeler domination<br />
  2. 2. Vietnam <br />In 1980 Vietnam began to liberalize its economy <br />In 1994 President Clinton lifted the US trade embargo<br />Post 1994 all multinationals began to pile in. Since then, Vietnam has taken off. <br />In 2007, it joined the World Trade Organization (WTO)—The country posted 5 percent growth in 2009. <br />Suranjan Das<br />2<br />
  3. 3. Characteristics of Vietnam Motorcycle market<br />Suranjan Das<br />3<br />Population <br />forecast (millions)<br />SYM<br />Honda<br />Yamaha<br />Piaggio<br />7 foreign Manufacturer<br />Suzuki<br />Motorcycle demand <br />forecast (millions)<br />45 Domestic Assemblers<br />SYM<br />Source: Vietnam Development Forum<br />
  4. 4. OEMs Presence Manufacturing & Distribution<br />Manufacturing<br />Vietnam now has 10 automobile JVs, <br />One 100 % foreign-owned enterprise (GM Daewoo) <br />One domestic manufacturer (Truong Hai). <br />The manufacturers make vehicles of 17 world brand<br />Fiat, Ssangyong, PMC, Mazda, Kia, Chevrolet, Daewoo, Mitsubishi, MercedesBenz, Suzuki, Toyota, Isuzu, Ford, Hino, Hyundai (trucks, bus), Chery and Honda.<br />Distribution<br />Vietnamese distributors offer more than 10 brands in Vietnam, <br />BMW (Euro Auto), Audi, Porsche (PSC), Hyundai (Thanh Cong), Lifan (BaoToan), Volkswagen (World Auto), Chrysler (IC Auto), Subaru (MIV), Dong Feng,  MAN (VMC) and Fiat - Alfa Romeo (Mekong Auto).<br />Suranjan Das<br />4<br />
  5. 5. Characteristics of Vietnam Automotive market<br />Suranjan Das<br />5<br />Jan-Aug 2010 sales figure<br />Car sales dropped <br />by 1% over 2009<br />Source: VAMA<br />
  6. 6. Growth Inertia<br />Domestic market is small for auto industry to grow.<br />Vehicle sale <100000 / year but car models >400.<br />The infrastructure in Vietnam remains very poor.<br />Government restricts the number of cars by imposing high taxes.<br />Global Tier-1s are afraid to invest as the cost is difficult to recover<br />Local industry don’t have the scale to operate profitably.<br />OEMs are forced to import components and parts from neighboring countries<br />Suranjan Das<br />6<br />
  7. 7. Causes of High Price of domestic parts<br />Suranjan Das<br />7<br />Market<br />Size<br />Small <br />Market<br />No Economy<br />Of Scale<br />Low<br />Production<br />Efficiency<br />High<br />Price<br />Vicious Circle<br />High Part<br />Cost<br />High Tax & Tariff<br />No Growth<br />For Part industry<br />Kenichi Ohno: VDF<br />High Taxes<br />
  8. 8. Ford Vietnam <br />A JV established in 1995 between <br />Ford Motor Company (75%) and <br />Song Cong Diesel Company (25%) <br />Total investment of US$ 102 million. <br />It began business operation in 1997 with a total plant capacity of 14,000 units per year. <br />The Ford plant in Hai Duong is the first automotive manufacturer in Vietnam with ISO 9001, ISO 14001, QS9000 and ISO TS 16949 accreditation.<br />Suranjan Das<br />8<br />
  9. 9. GM Vietnam<br />VIDAMCO Started as a JV between <br />Daewoo Motor and <br />7983 EngineeringEnterprise (under Ministry of Defence).  <br />Was established on December 14th, 1993<br />VIDAMCO acquired the local partner’s share and has become the first wholly foreign owned carmaker in Vietnam since April 2000. <br />The company’s head office and factory are situated at TuHiep Commune, Thanh Tri District, Hanoi City <br />Annual assembly output of various models up to 10,000 units of passenger cars and 500 units of buses per shift.<br />Suranjan Das<br />9<br />
  10. 10. Suranjan Das<br />10<br />Thanks for viewing this presentation<br />The author can be contacted at das_suranjan@yahoo.com<br />

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