Business / Corporate

Honda Vietnam sees 98% year-on-year increase in car sales in first eight months

Nna/kyodo

Honda Motor Co. is upbeat about its automobile sales in Vietnam after resuming imports that had been suspended following the country’s introduction of nontariff barriers this year aimed at encouraging domestic production.

Honda Vietnam Co., its manufacturing and sales arm in the Southeast Asian country, saw a 98 percent year-on-year increase in car sales in the January-August period to 15,220 units, which already topped the annual total of 12,134 vehicles sold in all of 2017, industry data showed.

Toshio Kuwahara, general director of the car and motorcycle business unit, said that the local arm restarted car imports from Thailand in March, with sales boosted mainly by the fully remodeled CR-V sport utility vehicle that launched in Vietnam last November.

An employee at a dealership in Ho Chi Minh City said early this month that customers have to wait six months for delivery of the seven-seat SUV.

The Vietnamese government eliminated car import duties from this year in line with an agreement among the 10 member countries of the Association of Southeast Asian Nations.

But it imposed nontariff restrictions on automobile imports in an attempt to nurture the domestic car industry.

In importing vehicles, automakers in Vietnam must obtain the Vehicle Type Approval — a quality-guaranteeing certificate — from the authorities of exporting countries and must also pass a vehicle test for each shipment.

Carmakers are also required to own test courses meeting the government’s standards by April 2019.

Honda was quick to obtain the certificate from the Thai government and promptly resumed CR-V imports, while its Vietnamese unit was able to meet the test course requirement by upgrading an existing course, according to Kuwahara.

Toyota Motor Vietnam Co., the local unit of Japan’s largest carmaker, resumed imports in August but its sales in the January-August period in the market fell 12.5 percent from a year earlier to 34,749 units.

Honda more than doubled its market share in Vietnam from 4.4 percent last year to 9 percent in the first eight months of this year, exceeding the 7.3 percent share of U.S.-based Ford Motor Co. to rank second after Toyota.

Honda also has seen robust sales of the locally assembled City sedan, which reached 6,664 units in the January-August period compared to the full-year total of 6,914 in 2017, data shows.