Category: Cars

Year on year sales are also up about 2 percent, on the back of the jump in sales in September. Car imports are also up averaging 13,820 units a month so far this year which is up from an average of 9,612 in 2023…

The joint venture between Mercedes-Benz and local firm SAMCO had requested an extension of its land lease as far back as 2021, however, the request was never actioned due to the aforementioned regulatory challenges (the can was kicked down the road). This came to a head earlier this year, however, when the company said it was considering shutting down its operations in Vietnam altogether as a result of the lolly-gagging…

A new assembly plant for the Czech Republic’s Skoda vehicles is set to go into operation later this year in northern Vietnam, The Investor is reporting. The plant in Quang Ninh province is 90 percent complete, according to the firm, and began a trial run back in May. Set on 36.5 hectares the factory will add a capacity of 120,000 vehicles a year to Vietnam’s automotive industry…

Of note, Vietnam’s cities are already straining to accommodate the rise in car ownership and the penetration rate is only around 5 percent. If the country is to reach car sales of 1 million units a year, there will need to be some fairly big investments in infrastructure. It’s not clear how or if this will be addressed…

Of note, VinFast’s expansion outside of Vietnam has been rife with big announcements that have failed to materialise. Most recently, a factory in North Carolina announced back in 2022 was put on ice this year after the company failed to meet sales targets in the North American market. This fits with a largely rocky market entry in the US, at least partly due to the vastly different auto-market dynamics in Vietnam versus in the United States.

This challenge looks to stem from regulations that require the Ho Chi Minh City government to reclaim the land at the end of the lease and reassess its use case. Reportedly there is no way around this with the Ho Chi Minh City government asking the national government for assistance. What is perhaps most concerning, however, is that it has been suggested that if the factory were to close it is unlikely to reopen with Mercedes-Benz to be imported instead.

The project was originally approved in 1995 and given a 30 year lifespan. The operators of the plant, a joint venture between Mercedes-Benz Group AG and Saigon Transport Mechanical Corporation have requested a five-year extension, however, current regulations dictate that at the end of the licence the land must be reclaimed by the city. There does not appear to be regulatory provisions for an extension without interruption.

Of note, the Ministry of Finance earlier this year raised concerns that registration fee cuts may create legal problems. Specifically, the policy could be seen to be discriminating between locally made and imported vehicles which would put it in breach of EVFTA rules…