Vietnam Sees Strong Growth in Auto Sales
HCMC – The Vietnam Automobile Manufacturers’ Association (VAMA) has announced that August was the 17th consecutive month of auto sales growth within the country. The month saw a 59 percent year on year increase, with total sales of 12,562 units. Overall sales for 2014 are now forecast to be 130,000 units, representing an 18 percent growth year on year.
Sales in the current eight month period of 2014 have seen a 32 percent increase compared with 2013, amounting to 77, 150 units. August saw a two percent increase in sales over the previous month.
Additionally, August saw a year on year increase of 0.1 percent in the sales of domestically assembled autos, reaching 9,700 units. The number of imported autos declined two percent, falling to 2,834 units.
Auto sales have been climbing in the country due in part to Vietnam’s lowering of interest rates and improved liquidity throughout the economy. The country has a fast growing middle class, with rising wages and a desire to move beyond the more common forms of transportation such as motorbikes. A recent decision by the Vietnamese Ministry of Finance to lift the ban on the purchase of new cars by government agencies could further help boost auto sales in the country.
VAMA’s data covers passenger cars, SUVs, and commercial vehicles manufactured by 21 members of the association. The top Vietnamese manufacturer is Truong Hai Auto Corporation, which assembles buses, trucks, and sedans. Truong Hai Auto took the top position in May after manufacturing more units than Toyota. Ford is in third place.
However, analysts caution that there may be signs that sales growth is slowing. This can be partly explained by the market trend of consumers preferring to make large purchases, such as cars, at the beginning of the year and tapering off their spending towards the end of the year.
Despite an increasingly competitive auto market throughout the ASEAN region, Vietnam has stated that it intends to work aggressively to build up its own domestic auto industry. One of the key reasons for this goal is that, if the country relies solely upon imports, the foreign exchange balance will be negatively affected. Additionally, the auto industry has the potential to create thousands of jobs for locals and create a strong system of supporting industries.
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