Jul 17, 2012

Vietnam - Electric cars don’t attract domestic auto manufacturers

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VietNamNet Bridge – Automobile manufacturers believe that despite the great advantages, electric cars would not be favored in Vietnam in the near future.

Russian automobile manufacturer Yo Auto is going to sign a cooperation agreement with a Vietnamese partner on building a factory specializing in making electric cars.

This seems to be the only piece of good news these days, when domestic automobile manufacturers repeatedly complain about the slow sales and warn about the possible leave of the “big guys” from Vietnam.

Dat Viet has quoted its sources as saying that Yo Auto would team up with the Vietnamese partner to set up a joint venture to build a factory specializing in making Yo Mobile electric hybrid cars.

The factory is expected to have the capacity of 100,000 cars a year. The investment plan was initially planned to be inked in May 2012, but the signing has been delayed until early 2013 because of some reasons.

However, operational automobile manufacturers seem to keep indifferent to the information, believing that it’s now not the right time for developing electric cars in Vietnam, even though these cars have great advantages. Especially, the cars use clean fuel, do not cause noise and do not cause pollution to the environment.

Pham Anh Tuan, a senior executive of Toyota Vietnam, thinks that it’s a bit too early to invest in the electric car technology development now, even if the government of Vietnam offers investment incentives to the “clean vehicle manufacturers.”

However, Tuan believes that the Russian investor has his reasons to move ahead with the hybrid car project.

“I believe that Yo Auto plans to make cars in Vietnam to export to other countries, not to consume in the domestic market,” Tuan said. “The output of 100,000 cars a year announced by the manufacturer, once again, affirms my prediction.”

Analysts have also thought that the Vietnamese market is too small for automobile manufacturers. Over 20 automobile corporations have been operational in Vietnam – the small market which consumes only 120,000 cars a year. Especially, the sales in 2012 are believed to decrease to 80,000 cars due to the economic difficulties which have forced people to cancel the plans to buy luxurious items.

Therefore, the manufacturers setting up production bases in Vietnam would not target the Vietnamese market.

In order to develop the vehicles running with clean fuel, Vietnam needs to have a good infrastructure system. Electric cars need to have the battery charged regularly, while there has been no charging station so far.

The biggest outstanding feature of electric cars is that they friendly to the environment. However, this is not an important factor Vietnamese people would consider when choosing cars. To date, Vietnamese people still favor petrol-run motorbikes, even though the petrol price has been increasing. Electric bicycles and electric motorbikes have been available in Vietnam for a long time, but they have been selling very slowly.

When asked about the prospect of the clean fuel vehicle production in Vietnam, Tuan said that only if the government gives support, will the production be able to develop.

Existing automobile manufacturers can absolutely make investments to make electric cars, because investments needed for an electric car manufacturing factory would not be higher than the investment capital for petrol-run car factory. However, it will be impossible if only one enterprise comes forward and makes electric cars. One manufacturer alone will never be capable to build charging stations nationwide.

Source: Dat Viet


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