Vietnam, Automotive, Motorbike, Cars

1. Suranjan Das 1 Vietnam Auto Market Country Analysis Suranjan Das Two wheeler domination

2. Vietnam In 1980 Vietnam began to liberalize its economy In 1994 President Clinton lifted the US trade embargo Post 1994 all multinationals began to pile in. Since then, Vietnam has taken off. In 2007, it joined the World Trade Organization (WTO)—The country posted 5 percent growth in 2009. Suranjan Das 2

3. Characteristics of Vietnam Motorcycle market Suranjan Das 3 Population forecast (millions) SYM Honda Yamaha Piaggio 7 foreign Manufacturer Suzuki Motorcycle demand forecast (millions) 45 Domestic Assemblers SYM Source: Vietnam Development Forum

4. OEMs Presence Manufacturing & Distribution Manufacturing Vietnam now has 10 automobile JVs, One 100 % foreign-owned enterprise (GM Daewoo) One domestic manufacturer (Truong Hai). The manufacturers make vehicles of 17 world brand Fiat, Ssangyong, PMC, Mazda, Kia, Chevrolet, Daewoo, Mitsubishi, MercedesBenz, Suzuki, Toyota, Isuzu, Ford, Hino, Hyundai (trucks, bus), Chery and Honda. Distribution Vietnamese distributors offer more than 10 brands in Vietnam, 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). Suranjan Das 4

5. Characteristics of Vietnam Automotive market Suranjan Das 5 Jan-Aug 2010 sales figure Car sales dropped by 1% over 2009 Source: VAMA

6. Growth Inertia Domestic market is small for auto industry to grow. Vehicle sale <100000 / year but car models >400. The infrastructure in Vietnam remains very poor. Government restricts the number of cars by imposing high taxes. Global Tier-1s are afraid to invest as the cost is difficult to recover Local industry don’t have the scale to operate profitably. OEMs are forced to import components and parts from neighboring countries Suranjan Das 6

7. Causes of High Price of domestic parts Suranjan Das 7 Market Size Small Market No Economy Of Scale Low Production Efficiency High Price Vicious Circle High Part Cost High Tax & Tariff No Growth For Part industry Kenichi Ohno: VDF High Taxes

8. Ford Vietnam A JV established in 1995 between Ford Motor Company (75%) and Song Cong Diesel Company (25%) Total investment of US$ 102 million. It began business operation in 1997 with a total plant capacity of 14,000 units per year. The Ford plant in Hai Duong is the first automotive manufacturer in Vietnam with ISO 9001, ISO 14001, QS9000 and ISO TS 16949 accreditation. Suranjan Das 8

9. GM Vietnam VIDAMCO Started as a JV between Daewoo Motor and 7983 EngineeringEnterprise (under Ministry of Defence). Was established on December 14th, 1993 VIDAMCO acquired the local partner’s share and has become the first wholly foreign owned carmaker in Vietnam since April 2000. The company’s head office and factory are situated at TuHiep Commune, Thanh Tri District, Hanoi City Annual assembly output of various models up to 10,000 units of passenger cars and 500 units of buses per shift. Suranjan Das 9

10. Suranjan Das 10 Thanks for viewing this presentation The author can be contacted at das_suranjan@yahoo.com