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Indian low-cost small cars flood market

24/08/2016

India became Vietnam's largest exporter of low-priced completely built-up (CBU) small cars during the first seven months of this year, according to the Vietnam General Department of Customs.

The Vietnam General Department of Customs' statistics showed that India along China ranked the third among the biggest CBU car exporters to Vietnam in the January-July period with 7,900 units, just behind Thailand with 18,800 units and South Korea with 12,000 units.

However, up to 95% or 7,500 out of India's total number of 7,900 cars imported into Vietnam during the phase were low-cost small cars.

 

More Indian low-cost small cars imported into Vietnam

The average price of each Indian small car is VND154 million (USD7,400), much cheaper compared to the price of around 18,000 per car imported from Thailand. Most of India cars sold in the Vietnamese market are compact Hyundai Grand i10 and multi-purpose vehicle Suzuki Ertiga.

Experts said that under the ASEAN-India Free Trade Agreement, the import tariff for Indian cars to ASEAN countries is 68%, lower than that of cars from other countries outside the region.

Last year, Vietnam imported 25,000 cars from India, an 89% year-on-year surge. With this figure, India accounted for almost half the volume of CBU passenger cars Vietnam imported in the year.

Meanwhile, Thailand's leading position in exporting trucks and pickups in Vietnam is because the country is the production hub of many big car firms such as Ford, Toyota, Izuzu and Mitsubishi.

In the first seven months of this year, Vietnam imported 60,600 vehicles valued at some USD1.2 billion, including trucks and cars with below nine seats.

Companies in Vietnam have tended to import more low-cost cars to meet the increasing demand of the local market. They have also shifted to importing CBUs rather than assembling vehicles in the country, threatening Vietnam's car industry, which is still small and has weak support industries. 

 

By Nguyen Tuyen | dtinews.vn | August 23, 2016 10:26 AM

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