Boston, MA -- (ReleaseWire) -- 05/30/2014 -- According to the Vietnam Automobile Manufacturers Association (VAMA), vehicle sales of its members grew 21.7% year-on-year (y-o-y) in March 2014, to 9,313 units. This monthly sales figure, the highest in the year so far, brought sales for Q114 to 24,168 units, an increase of 29.3% y-o-y.
Our bullish outlook on the Vietnamese auto market is reinforced by the latest sales growth figure. Despite Q114 sales in both the passenger car and commercial vehicle (CV) segment coming in above our forecast, we are happy to maintain our full-year estimate given that we expect higher base effects to temper growth in the latter part of the year. We forecast total vehicle sales to grow 10.0% in 2014, to 104,980 units (this excludes sales of Mercedes-Benz, which reports its figures separately). Furthermore, the upcoming public holidays on April 30 2014 and May 1 2014 will provide a further sales boost to the industry in the near term.
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The luxury segment has also seen its fortunes soar in the first quarter of the year with many automakers and dealerships reporting revenues that have exceeded their targets.
Our bullish outlook on the sector chimes with our Country Risk team's optimistic view on Vietnam's economy. As the government takes steps to privatise the country's state-owned enterprises, we see it as a harbinger for more free market reforms in the coming years, which will undoubtedly provide a boost to economic growth (see 'Privatisation Of SOEs Highly Positive For The Economy', January 8).
We have also upgraded our 2015 vehicle sales growth forecast from 7.2% to 8.6% due to the gradual abolishment of import tariffs on vehicles imported from other ASEAN countries as part of the region's Trade in Goods Agreement. As duties are slowly reduced, imported cars, which were previously priced out of the local market due to high taxes, will now become more affordable for the average Vietnamese consumer. This will then result in sustained sales growth for the imported car segment.
The Vietnam Autos Report features the latest data and forecasts covering production, sales, imports and exports.
Business Monitor International (BMI)'s Vietnam Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the automotives market in Vietnam.
- Benchmark BMI's independent automotives industry forecasts on Vietnam to test other views - a key input for successful budgetary and planning in the Vietnamese automotives market.
- Target business opportunities and risks in the Vietnamese automotives sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Vietnam.
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