China's automobile industry has achieved rapid development in recent years, and has become the world's largest automobile production and sales country for more than ten consecutive years, as well as the world's largest automobile exporter. According to the latest data, China's auto exports continued to grow, with 48 auto exports in October80,000 units, up 9% month-on-month8%, a year-on-year increase of 442%；From January to October, automobile exports were 39220,000 units, a year-on-year increase of 597%。China's automobile exports are mainly concentrated in Europe and the United States, and Belgium, the United Kingdom, Russia and other countries have become the main automobile export destinations. In addition, Southeast Asia is also one of the potential export markets for Chinese automobiles, with the rapid development of Southeast Asia's economy and huge population, some well-known Chinese car companies are actively exploring this market, such as Changan and BYD and other brands have built car factories in Thailand, trying to enter the Southeast Asian market. As a country with a population of nearly 100 million, Vietnam is also one of the target markets for Chinese auto brands. Although some Chinese automakers have launched a series of actions in the Vietnamese market, they will face many challenges.
1. No tariff and subsidy protection
In order to protect the country's auto industry, Vietnam imposes tariffs of up to 80% on the import of finished vehicles, but the import tariffs on auto parts are low. In order to reduce costs, many automakers choose to export parts to Vietnam, and then assemble them locally into finished vehicles for sale. However, Chinese automobiles are mainly exported to complete vehicles and have not opened factories in Vietnam, resulting in the need to pay high tariffs, which makes Chinese automobiles lose their advantage in terms of cost performance. In addition, the export growth of China's new energy vehicles is mainly due to the subsidy policy, which the Vietnamese market does not enjoy, further reducing the competitiveness of Chinese cars in the Vietnamese market. In contrast, cars exported to Vietnam from other Southeast Asian countries enjoy lower tariffs, giving them an advantage in the Vietnamese market.
2. The distribution system and after-sales service cannot keep up
Vietnam's car market is unique in that there is no mandatory regulation on the number of years of car scrapping, resulting in many vehicles having a long service life and requiring maintenance. In addition, Vietnam's infrastructure and road conditions are not perfect, requiring vehicles with high reliability and resilience to cope with complex road conditions. Japanese cars perform well in this area and are recognized by Vietnamese consumers. One of the reasons for the popularity of Japanese and Korean cars in the Vietnamese market is that they entered the Vietnamese market early and established a complete dealer network and after-sales service system. In contrast, Chinese car brands have a smaller market share in Vietnam, and the corresponding dealership network and service network are also smaller, making Vietnamese consumers suspicious of the quality of Chinese vehicles and reluctant to buy Chinese cars.
3. Vietnamese consumers' prejudice against Chinese brands
After more than ten years of development, the overall quality of China's auto industry has been greatly improved, and the competitiveness has also been significantly improved. However, Vietnamese consumers are still prejudiced against Chinese brands, believing that the quality of Chinese brands is not up to par. Especially in the field of motorcycles, Chinese motorcycle brands have entered the Vietnamese market with low prices, but the quality has declined and the maintenance cost has increased, leaving a very bad impression on Vietnamese consumers. This impression has made Vietnamese consumers skeptical of Chinese car brands and reluctant to buy Chinese cars. Changing this stereotype requires Chinese auto brands to have a good reputation in the European and American markets and establish a good brand image, which is likely to change Vietnamese consumers' perception of Chinese cars.
To sum up, Chinese cars are facing multiple factors if they want to open up the Vietnamese market. However, with the continuous development and improvement of the quality of China's auto industry, as well as the establishment of word of mouth, Chinese auto brands have the potential to change the stereotype of Vietnamese consumers and are expected to further develop the Vietnamese market.