In any angle of product, sedan seems to be the apparent face of the Vietnamese automobile industry, said an article published on the Vietnam Business Forum - a weekly magazine of the Vietnam Chamber of Commerce and Industry.

However, many people forget, intentionally or unintentionally, that the automobile industry is not only made up by only the sedan but also a variety of extremely important means to the economy, or to be more specific, production and business activities of the business community, business households and individuals.
According to the article, such other means include trucks, vehicles for special purposes, and passenger cars (more than 10 seats).

Less than four years before import taxes on CBU (completely built unit) cars from Southeast Asian nations are brought to zero percent, automakers in Vietnam are still squirming with simple assembly processes.

Localisation ratio in assembled-in-Vietnam automobiles is very low, except for some models like Toyota Innova with a locally sourced component ratio of 40 percent or so.

Meanwhile, other ASEAN countries like Thailand and Indonesia have strongly emerged to be leading automobile manufacturing centres in the world. They are exporting automobiles to the world where Vietnam is a potential market with a population of over 90 million and a very low car-to-people ratio.

Foreign-led car joint ventures admitted that Vietnam would impossibly develop the automobile industry with sedans being the flagship in the next four years. There was a warning that Vietnam would have only three foreign-led carmakers with production bases in the country by 2018.

The article said if the Vietnamese automobile industry lacks breakthrough changes, the remainders will be fewer, proposing that commercial vehicles are the cure. Trucks and buses hold enormous advantages, and commercial vehicles do not face as heavy pressure as imported vehicles like sedans.

For example, Vietnam will have to slash import tariffs on completely built cars from Southeast Asian nations to zero by 2018. This is very much worrying manufacturers of cars with less than 10 seats.

Among the 56 automobile manufacturers in Vietnam now, bus and truck makers like Truong Hai, Vinaxuki, Samco, Vinamotor and VEAM are controlling the market. Fair enough, trucks and buses are helping Vinaxuki and Truong Hai to sustain development and nurture the ambitious dream of making sedans or hatchbacks.

Previously, some experts suggested that instead of trying to make a Vietnamese sedan, automakers should focus on researching and manufacturing trucks and buses.

They argued why Vietnam did not focus on what it was good at instead of trying to raise the localisation ratio in cars with less than 10 seats. Indeed, Vietnam was hoped to bring the localisation ratio to 40 percent in cars assembled in Vietnam in 2010 while the actual rate was just 5 percent. Meanwhile, it is easy to raise the ratio in buses and trucks to over 50 percent.

According to the new automobile development strategy to 2020, with a vision to 2030, the Ministry of Industry and Trade has drafted fundamental changes to the focus on vehicles. Vietnam will focus on manufacturing midsize and small trucks, passenger cars and vehicles for special purposes (concrete mixers, tankers, etc.) The strategy also mentions Vietnam’s ambition to become a supplier for global automobile value chains.-VNA