January CBU imports triple last year

Hung Le

A model poses next to a Lexus car at an exhibition of high-end autos in this file photo. CBU imports in January triple the volume recorded a year ago - PHOTO: HUNG LE

GSO data showed Vietnam spent US$156 million importing CBU autos in the first month of 2015, up a staggering 144.5% over a year ago.

Industry sources said the strong growth of CBU imports is not surprising because January is the month in which people normally buy new cars for the Lunar New Year holiday, or Tet.

CBU imports are forecast to keep rising strongly this year because most auto-assembly joint ventures in Vietnam import CBU autos for domestic distribution while they have no plan to assemble those models locally, while import tariffs on CBU vehicles are falling.

Even Mercedes-Benz, the only luxury automaker which has an assembly factory in Vietnam, might be less affected by Vietnam’s tariff reductions on thousands of items imported from Southeast Asian countries as committed to the ASEAN Trade in Goods Agreement (ATIGA), as it is switching from car assembly to CBU auto import.

Under ATIGA, the duty on CBU autos of under 10 seats imported into Vietnam from other ASEAN countries will go down to 0% in 2018, which will affect sales of popular car models assembled domestically because Toyota, Honda, Ford and Mazda all have factories in other ASEAN countries.

Leaders of Mercedes-Benz Vietnam said the company would introduce 20 new models on the market, most of them CBU autos. The first four auto models that the firm presented on the market this year are all imported.

Several other domestic auto joint ventures said they will shift to importing CBU vehicles.

Vinastar, an automobile joint venture with Japanese firm Mitsubishi, recently announced a plan to import CBU autos because their tariffs will fall gradually until 2018.

It said it would import CBU cars, citing the ad hoc nature of Vietnam’s policy change for the auto sector.

Imports of CBU autos have grown strongly since early last year. The country imported 72,000 CBU units worth a combined US$1.57 billion during the year, up a staggering 103.8% in volume and 117.3% in value against the previous year.

The number of CBU cars accounted for nearly half of the local car market. According to the Vietnam Automobile Manufacturers Association (VAMA), auto sales hit 157,800 units last year, soaring 43% against 2013.

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