Vietnamese car nut interview

1 Like China, Vietnam’s economy has grown a lot within a short span of time. What was the state of car ownership like when you were a kid versus now?

When I was a kid, cars were a bit more of an upper class luxury or reserved for high ranking public officials. You had cars, yes, but most of them are Vietnam War-era leftovers with decades of DIY fixes on top of them that make them barely resemble the original car. Newer cars did exist at the time, mostly imported by either the really rich or the government. Toyota sedans the likes of the Camry or the Crown made up most of the new cars I saw in the streets at the time.

Nowadays, cars are quite common. It’s still a luxury most can’t afford but rising wages and improvements in living standards made cars more accessible to everyone. High end cars are also more common nowadays as well. When I was a kid, it’s an event to see a Mercedes, now you see one on every street corner. In big cities like Saigon, you eventually get desensitized to seeing exotics and supercars. Sure a Huracan or a Ghost would be cool for the first time, but you’ll be seeing that exact model about seven times a day. It gets to the point where an old Lada would turn more heads simply because it’s different.

2 The only Vietnamese car manufacturer I know of is VinFast. Is there bona fide domestic manufacturing? Is it mostly Japanese cars produced locally?

In all honesty, I would say we don’t have any bona fide domestic manufacturing operations going on. Even VinFast cars are assembled from imported parts with not much in the way of local production going on. Assembling CKD cars is a common thing in Vietnam though, as it helps reduce the prices significantly. Most Japanese cars are locally assembled but only for low- to mid-end models. Higher end cars like the Toyota Camry, Toyota Land Cruiser, anything Lexus or the Nissan Teana would be imported (yes, we consider them high end here).

3 What is the state of car culture in Vietnam?

It’s colorful despite cars being quite the inaccessible luxury to most. Cars are still mostly regarded as a status symbol but most owners consider their cars a family member and a friend and take good care of them. Car meets have recently became a thing over here which makes quite the perfect compliment to the yearly car shows. Motorsport is also developing here and we even have an F1 street course, though to my knowledge no races actually took place there due to Covid.

4 What cars have you owned?

I have been through a few cars, but I will admit I got commitment issues as I don’t keep them in my garage for long. In chronological order, I owned a 1989 Toyota Camry Alltrac, a 2007 Toyota Camry LE, a Lexus GS300, a Range Rover Evoque, a Mercedes S400L (W222), a Toyota Corolla 1.8 CVT, a Nissan Navara, a 2019 Toyota Camry 2.0 CVT, a 2022 Toyota Wigo, a 2017 Honda CRV and I’m currently looking for a new daily driver. The chip shortage is making the latter quite difficult, though, with most dealerships quoting 6+ months for the cars I inquired on.

5 What is the state of rural roads and traffic? Is it possible to enjoy a long drive in a sports car or GT car there?

Roads in rural areas vary in quality, but generally it would be wise to keep the sport cars and GT cars on main roads and highways. The worst case scenario, you need 4x4s to actually get places. You wouldn’t want to drive sport cars or GT cars out in the rural area anyways as they don’t sell high grade petrol out there.

6 What’s something about Vietnam that most people in the West do not realize?

I heard the opinion that Vietnam is a backwards communist/socialist state quite often from Westerners, but most don’t realize that the whole socialism thing kinda went out of fashion in the 1980s. Vietnam is a capitalist nation through and through, even if the ruling party keeps denying it and insisting we’ll try for true communism eventually. I think we all realized in the 70s and 80s that it just doesn’t work.

7 What are some popular cars there right now?

The most popular brand on the road is still Toyota. It wouldn’t be an overstatement to say that Toyota is our national brand. With their history with our country, they earned the trust of consumers. The diverse range of offerings also helps them reach more audiences. If you are looking for a fleet solution? The Vios and Innova is a popular choice. An entry level city car? The Wigo is a very solid (albeit dated) option. If you find yourself in the upper class of society, the Camry, Land Cruiser, Land Cruiser Prado and Alphard are available to serve your needs.

Mitsubishi after years of trailing behind in terms of sales also became very popular in the last few years with their most popular model being the Xpander MPV, which has became the choice for ride sharing drivers. They also dabble in other market segments but with little success.

Kia and Hyundai cars are overall very popular too, with the K3, Morning (Picanto) and Accent being a popular choice for younger buyers. The newly introduced Kia Carnival has also became quite popular around here, surprisingly. Families don’t usually buy minivans in Vietnam.

Luxury cars have also became popular, with Mercedes leading the charge in terms of sales and brand recognition. Plenty of C, E and S Class around here. I’m also quite sure the G Wagon became some sort of a cult among celebrities and their fanclubs, especially the G63 AMG. I lost count of the amount of matte grey G63 AMGs around here.

Other popular cars I don’t have much to really say about would be the E46 and E90 series of the 3 series, Q7, Q5, Mazda 6, Mazda 3, Mazda CX-5, Ford Everest and the Ford Ranger.

8 Are scooters still prevalent? Are they going to go extinct as the economy continues to mature? What is the perception of scooters there?

Scooters are still very prevalent and I don’t see them going out of style any time soon. Our culture, way of life and infrastructure have been shaped around these two wheeled vehicles and it’s unlikely that they’ll go extinct as the economy matures. We’ll probably see a reduction in their numbers as more and more people get their first cars, but they are going to stay for a while.

Scooters are considered an essential here. Public transportation isn’t the best and as previously said cars are out of the price range for most. Scooters offers a fast, cheap and convenient mode of transportation for the average citizen from the cities to the rural villages which made them a fact of life all over Vietnam.

9 Are cars expensive to own in Vietnam? How are they taxed?

Cars are very expensive to own in Vietnam. Some cars cost double or even triple their MSRP abroad. For example, the Lexus LX570 carries a modest MSRP of 87k USD (source: Edmunds) while in Vietnam, you would be paying roughly 400k USD or more. Even basic cars like the Toyota Camry cost an extortionate amount. In the United States, the Camry would start at 26k USD. In Vietnam, even with all the tax incentives, you would be looking at 80k USD starting price.

Every car on our road is taxed multiple times. Firstly, if applicable, is the import tax. If your vehicle was made in an ASEAN nation, the import tax is 30%. For imports from other regions the import tax is 70 to 80%. After having applied the import tax, you also need to apply special consumption tax which goes up the bigger your engine is, starting at 15% for electric cars and 130% for cars with cylinder capacities from 5000 cm3 upwards. Once you are done with those two, you still need to pay VAT which is 10%. All of the taxes I listed do not even cover the registration fee which would be 10% of your car’s value. There are also a few more fixed fees but the amount is insignificant.

Once you get past the rather insane buying in cost, it’s very cheap to keep your vehicle on the road as fixed yearly fees are insignificant.

10 Why do you love cars?

I couldn’t actually explain this. I liked cars since I was a kid. I collected scale model cars, read car magazines and catalogues in my spare time and spent afternoons on the balcony trying to identify cars passing below in the street. Cars have always been a big part of my life and it’s likely to stay that way.