Decoding why Chinese cars are flooding the Vietnamese market

A line of Chinese electric cars distributed in Vietnam - Illustration photo

According to recent information from the General Department of Customs, in August, 15,061 completely built-up cars were imported, with a total value of 299 million USD. Notably, along with the Thai and Indonesian markets, China is a new market where Vietnam imports cars, with a total of 14,597 cars, accounting for 97% of the total number of cars imported into Vietnam.

Not only distribution, Chinese car company also expands investment

Of which, 2,443 cars were imported from China, and 1,223 were completely built-up cars with 9 seats or less, out of a total of 12,334 cars imported from the three markets above.

Not only importing into Vietnam, many Chinese car manufacturers are also ambitious to invest in the Vietnamese market. Most recently, Geely has completed signing a joint venture contract to manufacture and assemble cars with Tasco and authorized Tasco to distribute Geely Auto cars in Vietnam...

This company plans to build a CKD car assembly factory in Thai Binh , with an area of ​​30 hectares, with a designed capacity of up to 75,000 vehicles/year in the first phase, with a total investment capital of about 168 million USD.

Previously, Chinese electric car company BYD officially entered the Vietnamese market with three models Dolphin, Atto 3 and Seal, and is about to launch a pure electric D-size SUV in Vietnam next October.

Speaking to Tuoi Tre , Mr. Vu Tan Cong - former general secretary of the Vietnam Automobile Manufacturers Association (VAMA) - said that the massive import of Chinese cars into Vietnam is mainly due to the excess production of these cars in the market, not entirely due to the demand for cars in the Vietnamese market.

The proof is that although Chinese car imports have increased and account for a large proportion of the three largest import markets, the production of Chinese cars with less than 9 seats only stops at more than 1,200 units, while there are 11 car brands from this country entering the Vietnamese market.

"China has emerged as the world's leading electric car manufacturer by massively producing large quantities, creating a surplus crisis. Therefore, many car companies in this country have had to push their inventory to sell in many countries," Mr. Cong analyzed.

Will Chinese electric cars create competition?

Accordingly, the number of Chinese cars imported is mainly due to Chinese enterprises establishing Vietnamese companies to import and distribute. Most of these brands are imported completely, only the Wuling car line is manufactured and assembled by TMT Motor in a joint venture with GM.

Having experience working with many Chinese partners, Mr. Cong said that Chinese car lines are characterized by "colorful", decorative and integrated with many new technologies. The car's design is also increasingly improved and especially the quality is more advanced than before.

However, he acknowledged that the strategy of developing and distributing Chinese cars in Vietnam in the past has not been suitable and not really sharp. For example, in terms of price, Wuling cars when launched had an initial price of about 250 million VND. But then they had to reduce the price sharply, now at 200 million VND.

"High pricing makes these car lines less attractive to customers right from the start. The market development strategy should be to offer low prices, competitive enough to attract consumers" - Mr. Cong said.

Furthermore, the warranty and maintenance system is an important factor for car buyers to decide, but with the massive import of Chinese cars, the maintenance system is still not synchronized, creating a fear of buying Chinese cars that already existed in the past among Vietnamese people.

Consumers are also worried about using Chinese cars, as it is difficult to resell old cars, because these car models will be less competitive than other brands on the market. An important factor, according to Mr. Cong, is that most of the Chinese car models imported to Vietnam are mainly electric cars.

Source: https://tuoitre.vn/giai-ma-vi-sao-o-to-trung-quoc-do-bo-vao-thi-truong-viet-nam-20240925155925304.htm