Automobiles Sales in Vietnam Growing 49% in May 2007

According to the Vietnam Automobile Manufacturers Association (VAMA), the automobiles sales rose by 49% in May due to the backing of 12 foreign firms, as published on Thanhnien News.

Adding further VAMA said that 5,580 vehicles were sold in May 2007, about 20% up from April. Toyota and Honda sold 527 and 286 passenger cars, respectively, in May.

The main factor leading to this development is the Vietnam Government's decision to permit bringing in of second-hand vehicles. This decision was confirmed in May 2006 to enable people with average income to own a personal vehicle and also to oblige by better infrastructure plans.

After the announcement of this policy the manufacturers reduced their rates inciting an increase in the sales. Most of the automobile markets for second-hand cars are based in US, Australia and China. It is speculated that a large share of second-hand vehicles market in Vietnam will be captured by China. A prominent reason for it could be price that's less than others however the quality of cars made in China is an area of concern.

Apart from the import of second-hand cars, another reason contributing to the high sale of cars is the reduced consumption tax on imported vehicles. This in a way reduces the rates of imported cars.

If experts are to be believed, the current trend will continue for some more years to suffice the needs of the growing population of Vietnam. With the increase in the population, Vietnam is also doing great with its economy that would also push up the sales of automobiles.

Researcher at RNCOS states, "With the improved infrastructure and economy combined with better reforms, the market for automobiles would also get better. A Vietnamese traveling in a two-wheeler would consider purchasing a four-wheeler as and when his status improves and with such fast growing economy that wouldn’t take much time. What is remarkable is the fact that, even with a majority of citizens of Vietnam being small farmers the sale of luxury cars is on a rise. Therefore, any automobile company planning to sell its products in Vietnam has a bright scope and can cash in abundance."