Brian Jeffrey
Ten years back, Chinese car makers like Lifan, Chery, Zotye, and BYD introduced budget-friendly vehicles in Vietnam. Nevertheless, they are now shifting towards the premium market segment.
Chinese manufacturers are unveiling car models that directly compete with Japanese and South Korean counterparts. Models such as Haima 7X with a price tag of VND865 million, Haval H6 HEV priced at VND1.096 billion, and Link & Co 01 and 09 at VND999 million and VND2.199 billion respectively.
The pricing of Chinese models often surpasses the expectations of Vietnamese consumers, leading to doubts about whether the quality justifies the high cost.
Marketing experts suggest that Chinese auto brands are striving to erase the stereotype in the minds of Vietnamese consumers that Chinese products equate to cheap and subpar quality.
However, by positioning themselves in direct competition with Japanese and South Korean brands, Chinese manufacturers are encountering challenges.
For instance, MG HS was introduced in July 2020 at nearly VND1 billion to compete in the C-SUV market segment against Hyundai Tucson, Honda CR-V, and Mazda CX-5. Despite efforts, the product failed to gain traction and eventually exited the market.
Even after re-entering the market in January 2024 with a revamped version at lower prices (VND699-749 million) and offering discounts up to VND120 million, MG HS still struggled to attract buyers.
Similarly, Haval H6 HEV faced difficulties after its launch in August 2023 at VND1.096 billion, which was more expensive than competitors like Mazda CX-5 (VND999 million) and Hyundai Tucson (VND959 million). After disappointing sales, the price was reduced by VND244 million to VND852 million, but the brand continued to face challenges in securing customers.
When Haima 7X entered the market in late December 2023 as a mid-range product at VND865 million, slightly higher than the Toyota Innova Cross, it failed to attract attention. Recently, Haima reduced prices by VND140 million in an attempt to boost sales of the MPV model.
Nguyen Manh Thang, an expert from Whatcar Vietnam, explained that the high prices of Chinese cars in Vietnam are due to various factors, including high import tariffs ranging from 47-70%. Additionally, advancements in technological features, comfort levels, and manufacturing materials have contributed to the increased costs.
Despite the rise in prices, Chinese cars remain more affordable compared to Japanese and South Korean equivalents, which experts attribute to significant investments in research and development leading to improved quality.
Chinese automakers have demonstrated a strong commitment to the Vietnamese market by investing in R&D, developing advanced technologies, and recognizing the market’s potential for growth.
The main issues Chinese manufacturers need to address to succeed in Vietnam go beyond high prices and quality concerns to encompass distribution and maintenance networks. Vietnamese consumers tend to opt for American, Japanese, and South Korean brands due to a perception of safety and reliability, posing a challenge for Chinese brands to shift this mindset.
