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What’s Going On with Vietnam’s Car Market in 2024?
Last week, it was announced that Vietnam would once again cut registration fees for locally assembled cars. This is on the back of slower sales of Vietnam-made vehicles which is the result of a much broader rejig of Vietnam’s car market. This article looks at how Vietnam’s car market is changing, what’s making it change, and what might come next. Read More »
Aviation news
Vietnam’s Vietjet faces new legal action from original lessors in FW Aviation lawsuit
Finance providers BNP Paribas S.A and Natixis, which were the original lessors in a lawsuit brought by FW Aviation against Vietnam’s Vietjet in which two aircraft lease agreements were cancelled but Vietjet failed to return the aircraft, both filed new claims on August 8 against the airline in the UK. This came just over a week after the same court found mostly in favour of FW Aviation in the aforementioned case.
See also: The VietJet UK Court Ruling for Foreign Firms in Vietnam: Unpacked
Banking and Finance News
State Bank continues T-bill issuances, US$2.2 billion worth outstanding
The State Bank of Vietnam has continued to issue treasury bills to suck up excess liquidity in the economy. There are currently US$2.2 billion worth of T-bills outstanding as of the close of business on August 22. Also of note is that the State Bank has outstanding reverse repos to local banks worth US$2.1 billion.
See also: Vietnam Dong Tracker: Daily Updates.
Outstanding loans to Vietnam banks
| Issued | Length | Maturing | VND* | US$ | % p.a. |
| 15-Aug | 7 | 22-Aug | 17,044 | $682,505,233 | 4.25 |
| 16-Aug | 7 | 23-Aug | 13,925 | $557,603,281 | 4.25 |
| 19-Aug | 7 | 26-Aug | 4,945 | $197,999,254 | 4.25 |
| 20-Aug | 7 | 27-Aug | 4,879 | $195,355,542 | 4.25 |
| 21-Aug | 7 | 28-Aug | 2,683 | $107,439,522 | 4.20 |
| 22-Aug | 7 | 29-Aug | 8,941.63 | $358,059,526 | 4.25 |
| Total | 52,416 | 2,098,962,358 |
*billions
Outstanding T-bills
| Issued | Days | Maturing | VND | US$ | % p.a. |
| 8-Aug | 14 | 22-Aug | 10,000 | $400,432,991 | 4.25 |
| 9-Aug | 14 | 23-Aug | 3,250 | $130,143,325 | 4.25 |
| 12-Aug | 14 | 26-Aug | 8,100 | $324,357,210 | 4.25 |
| 13-Aug | 14 | 27-Aug | 6,500 | $260,286,650 | 4.25 |
| 14-Aug | 14 | 28-Aug | 2,150 | $86,094,815 | 4.25 |
| 15-Aug | 14 | 29-Aug | 3,900 | $156,171,990 | 4.25 |
| 16-Aug | 14 | 30-Aug | 4,150 | $166,183,015 | 4.25 |
| 19-Aug | 14 | 2-Sep | 2,300 | $92,101,430 | 4.25 |
| 20-Aug | 14 | 3-Sep | 5,000 | $200,216,496 | 4.20 |
| 21-Aug | 14 | 4-Sep | 5,000 | $200,220,500 | 4.20 |
| 22-Aug | 14 | 5-Sep | 4,700 | $188,207,270 | 4.20 |
| Total | 55,050 | $2,204,415,692 |
*billions
Car news
Government agrees to 50 percent registration fee cut for three months
The Government Standing Committee has approved a 50 percent cut to registration fees for locally assembled cars, Tuoi Tre has reported. This would be for three months as opposed to six as had been originally discussed.
Mercedes Benz plant in Vietnam’s HCMC future uncertain, on extension approval delays
The Mercedes Benz factory in Ho Chi Minh City is facing an uncertain future with its project licence coming to an end in 2025 but a number of challenges getting it extended, Tuoi Tre has reported.
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.
See also: Vietnam’s Automotive Industry: Foreign Investor’s Guide 2024
Education news
Vietnam public school system short 113,491 teachers
Vietnam has a teacher deficit of about 113,491 from preschool to high school, Cafe F has reported. Furthermore, though 27,826 new positions have been added just 19,474 new teachers have been recruited. This lack of teachers may pose broad challenges for Vietnam as it pursues a role higher up the global value chain which will require better educated and trained workers.
Of note, the lowest-paid teachers across preschool, primary school, and high school receive just VND 4.9 million or US$196.59 with the highest-paid teachers only VND 15.9 million or US$637.91 per month. For contrast, manufacturing and construction workers receive an average wage of VND 8.3 million or US$333 per month, with wages over the last twelve months growing by about 5 percent.
See also: How to Start an English Centre in Vietnam: Ultimate Guide 2024
Energy news
Low electricity prices in Vietnam see industry eschew electricity conservation: EVN exec
Manufacturing firms in Vietnam are not prioritising energy conservation due to electricity prices that are too low, Nguyen Quoc Dung, Head of the Business Department of Vietnam Electricity Group, told a seminar earlier this week. The manufacturing sector is responsible for about 51 percent of Vietnam’s electricity consumption according to the executive.
See also: Vietnam’s Cosmetics Industry for Foreign Firms 2024
Food and beverage news
Starbucks closes premium store in Vietnam’s Ho Chi Minh City
Starbucks has announced the closure of a high-end coffee shop it was running in Ho Chi Minh City under the Starbucks Reserve brand, Tuoi Tre has reported. The store has reportedly been open for seven years and was one of two in the country, the second in Hanoi.
Opening a cafe or coffee shop in Vietnam for foreign firms or individuals is not always easy. Not only are there a number of technical and licensing requirements that need to be met, but Vietnam has also developed its own very distinct and unique coffee culture which can make penetrating Vietnam’s coffee consumer class challenging. For example, a coffee at a local cafe can cost as little as US$2 as opposed to US$5 at Starbucks.
Understanding the nuances of Vietnamese coffee culture and the complexities of business establishment procedures in advance of entering the market can therefore be crucial to the success of a new cafe or coffee shop in Vietnam.
See also: How to Open a Cafe in Vietnam: Ultimate Guide 2024
Vietnam food and beverage outlets down 3.9 percent in six months to June: iPOS
Vietnam had 304,700 food and beverage outlets at the end of June down 3.9 percent, roughly 30,000 outlets, compared to the end of 2023, according to food and beverage point of sale technology provider iPOS. The bulk of this fall was in Ho Chi Minh City which recorded a contraction in the number of outlets of about 5.97 percent.
See also: Vietnam’s Food and Beverage Industry 2024
Manufacturing news
South Korea’s Signetics expands footprint in Vietnam
South Korean semiconductor manufacturer Signetics has signed an agreement with Vietnamese firm CNCTech in which the latter will operate a factory for the former in Vietnam’s Vinh Phuc province, The Investor has reported. The US$100 million factory will make components for South Korea’s Samsung and SK and is expected to go into operation in 2025.
See also: Vietnam’s Semiconductor Manufacturing Ambitions: Unpacked
Real estate news
Credit to Vietnam’s real estate industry shows steady growth March to May
Vietnam has seen a jump in credit to its real estate sector from March 31 to May 31 of 3.67 percent according to data from the State Bank of Vietnam via the Ministry of Construction. The biggest percentage-based jumps were in land use rights, and Industrial parks and export processing zones with 10.08 percent and 8.18 percent, respectively.
See also: Vietnam’s Real Estate Market Recovery 2024: Unpacked
Retail news
New Estée Lauder cosmetics store headed for Vietnam’s Noi Bai airport
Estée Lauder has reached an agreement with Vietnam’s IPP Travel Retail to establish a new cosmetics store at Hanoi’s Noi Bai International Airport, Kenh 14 is reporting. The store will cover 120 square metres and include a broad range of cosmetics brands including Estée Lauder, Tom Ford, Jo Malone, Clinique, MAC, and Bobbi Brown.
See also: Vietnam’s Cosmetics Industry for Foreign Firms 2024
Stock market news
Foreign traders net-sell US$29.9 million in HoSE shares
Foreign traders have returned to net-selling Ho Chi Minh Stock Exchange Stocks. In total, foreign investors sold just under US$29.9 million worth of stocks by the close of business on August 22. This brings the total net withdrawn from the market by foreign traders down slightly to just over US$2.53 billion year to date.
See also: Vietnam’s Foreign Investor Stock Sell-Off: Unpacked 2024
Foreign trader activity, last five trading days
| Buy | Sell | Change | ||||
| Date | VND* | US$ | VND* | US$ | VND* | US$ |
| 16/8 | 2,130 | $85,293,933 | 2,202 | $88,177,108 | -72 | -$2,883,175 |
| 19/8 | 1,185 | $47,452,259 | 1,495 | $59,865,930 | -310 | -$12,413,671 |
| 20/8 | 1,834 | $73,440,879 | 1,508 | $60,386,503 | 326 | $13,054,377 |
| 21/8 | 2,066 | $82,731,111 | 2,283 | $91,420,680 | -217 | -$8,689,570 |
| 22/8 | 1,682 | $67,354,176 | 2,155 | $86,295,036 | -473 | -$18,940,859 |
| Total | 8,897 | $356,272,358 | 9,643 | $386,145,256 | -746 | -$29,872,899 |
*billions
Source: www.hsx.vn
Trade news
US critical circumstances allegations filed re: solar cells from Vietnam, Thailand
The American Alliance for Solar Manufacturing Trade Committee has submitted critical circumstances allegations to the U.S. Department of Commerce regarding solar panels imported from Vietnam and Thailand. This is on the back of a surge in solar imports from the two countries, according to a press release from Wiley Rein which is representing the alliance.
Essentially, the firm is alleging that firms in Vietnam and Thailand have increased the speed at which they export solar cells to the United States in order to avoid possible future antidumping and countervailing duties.
This workaround has become common among Chinese firms in the last few years leading to a significant spike in antidumping investigations into imports from Vietnam. This has sparked renewed interest in seeing Vietnam shed its non-market economy tag in the hopes of securing lower anti-dumping tariffs. The most recent effort, however, was knocked back in July.
See also: Commerce’s Findings from Vietnam’s Non-Market Economy Review: Unpacked
The week ahead
There are a handful of events coming up this week. For more information see the: Doing Business in Vietnam: Events Directory 2024
Also, Vietnam is a dynamic market that is changing rapidly. To keep updated to date with the business environment and how it is evolving make sure to subscribe to the-shiv.