Surge in Vietnam auto sales set to peak

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HO CHI MINH CITY--Growth in auto sales will slow down in Vietnam over the next two to three years, in spite of soaring sales figures for the first half of this year, say industry leaders.

Automobile joint-ventures in Vietnam sold around 8,200 vehicles in the first eight months of 2000, double the total sold last year. However, few in the industry believe this "surprise" increase will repeat itself next year.

"We will continue to see growing demand for the rest of this year but the trend will slacken later," says Mutsuhiko Ono, director general of Toyota Motors Vietnam (TMV).

TMV currently commands around 30% of the domestic auto market, selling 2,886 vehicles over the first eight months of this year. Mr. Ono predicted his company would sell around 4,500 automobiles in total this year and 5,000 per year over the next three years.

Doan Tuan Viet, head of sales for Ford Vietnam, attributed this year's unexpected sales hike to a sharp rise in the number of small-scale businesses, a result of recent changes to Vietnam's Enterprise Law.

Another factor, he said, had been a government move to ban outdated and unroadworthy vehicles from the country's roads. This had resulted in bulk-buying of vehicles by some government agencies, including a project to replace Ho Chi Minh City's distinctive (but dangerous) three-wheeled Lambretta transporters with brand new Suzuki minibuses and vans.

Ford Vietnam has sold just 700 automobiles in Vietnam this year but recently reported encouraging sales figures for its new Laser model, launched in 1999.

Copyright October 2000, Crain Communications Inc.

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