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The age of small cars coming
The new found consumption tendencies of Vietnamese people is bringing opportunities to small car manufacturers.
The golden age of small cars kicked off several years ago with the resounding success in the sale of the Daewoo Matiz model, and then the Cheverolet Spark, Kia Morning and Hyundai Getz, and recently, the Chery QQ3.
Analysts have pointed out that Vietnamese people nowadays purchase cars because they need them as a means of transport. However, they no longer purchase cars just to show off their assets, as they did in the past.
In an opinion poll, more than a half of the people said that it would be a great waste of money to spend several billions VND just to buy a luxury car with good interior decoration and modern equipment, because they just need a car to take them to work and back every day, or for weekend leisure activities.
Hoang Hoa, an officer at a large bank, said that she is satisfied with her Hyundai Getz which is sufficient fir her family’s needs. “Cars should be seen as a means of transport, rather than a luxury item to show off to other people,” she said.
This is one of the reasons why small cars have become more popular in Vietnam, and also explains why small cars have been identified as a strategic product in automobile development strategy.
The Government has recently slashed luxury tax by 5% on cars with fewer than five seats, and a cylinder capacity of less than 2,000 c.c., which clearly aims at encouraging people to use small cars.
Fierce competition among manufacturers
Several years ago, when the Daewoo Matiz model appeared on the domestic market, it immediately attracted attention from the car buying public. With a sale price set at a little over $10,000, much cheaper than the prices of the majority of cars available on the market at that time, Matiz really generated a ‘small car trend’.
The small car market has continued to develop with the appearance of Hyundai Getz, Hyundai i10 and several other models. With the ‘soft’ prices, all the models have been selling well, which has produced excellent profits for manufacturers and distributors alike.
Automobile manufacturers have quickly appreciated the increasing demand for small cars and focused their efforts on making low priced models available.
As for GM Daewoo, as the model name ‘Matiz’ has become old hat, so the manufacturer has re-invented the Daewoo Matiz as the Chevrolet Spark. Although many people are aware that in reality the Spark is still the Matiz , the launch of a different brand name can attract new customers.
As the share of the car market has grown, more manufacturers want to get a piece of the action. A number of models are now being imported, so the market has witnessed new names like the Hyundai Getz, and the i10, Toyota Yaris hatchback, Fiat 500, and luxury models like the Volkswagen Beetle or Mini Cooper. Hyundai has reportedly earned substantial profits from the Santa Fe, Veracruz, Getz and i10 models.
The Haifei model produced domestically by Vinaxuki has not captured the interest of consumers for a number of reasons. However, the manufacturers claim that they are not disheartened and still plan to develop competitively priced domestic models.
While Vinaxuki is still busy with research and development plans, and GM Daewoo does not have new models to replace the Chevrolet Spark, VMC, the joint venture which assembles a lot of cars in Vietnam, saw the opportunity to launched the Chery QQ3.
In China, the Chery QQ3 leads the small car market , and VMC, having decided to assemble the same model, hope that QQ3 will be equally successful in Vietnam. Having similar characteristics and functions to the Matiz, but with a far lower price tag of $9,900, VMC has every reason to be confident about the success of the model.
According to experts, the appearance of Chery QQ3, has ignited fierce competition among small and low cost car manufacturers, which can only mean good news for potential buyers. Fierce competition, results in better products at lower prices.
VietNamNet, TBKTVN
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