Hello dear friends,

Frstly, I would like to mention the results of the first 5-month automotive industry of the year,that was announced earlier this week by OSD.
According to the OSD report, total automotive production has decreased by 12% in the first 5 months. Exports, on the other hand, has a decrease of 7%. Bearing in mind that 86 % of our total production has been exported in the first 5 months and this makes up for the severe contraction of 50% in the domestic market. 
Here we must underline the fact that ACEA data shows a contraction of 1.4% in EU car market over the first four months of this year. The reason for this contraction is passenger car sales, which showed a 2% fall as of May. So the need to comply with WLTP emission standards continues to affect sales . On the other hand, light commercial vehicle sales in the EU market increased by 5.9% in the same period. But let us remember that the EU market is dominated up to 90% by passenger car sales.
These figures make it clear that the internal market needs to be revived in order to ensure sustainable investments in our automotive production. I hope macro economic policies that provide production-oriented income growth will pevail over the country’s agenda after municipal election.

My dear friends,

This week, the other outstanding news bulletin drew our atention. Vietnamese authorities revealed the roll out of their the first domestic and national car, namely Fadil. 
detroitnews.com, based on Bloomberg News, gives the detail. Fadll was launched on last Friday by Vinfast,the automotive company of Vingroup JSC, a large real estate conglomerate in Vietnam. Six modern factories were completed in 21 months by VinFast in Haiphong, the northern port city of Vietnam, and they became the Centers of production. 
The retail price of Fadıl hatchback is $ 16,900. This car will compete with Toyota, Honda and Ford branded cars of same size in particular throughout the country. 
Another point that drew our attention to this news was that Vingroup has invested a total of 3.5 billion dollars in automotive sector since 2017. We also learned that Fadil Hatchback will soon be followed by its Sedan and SUV versions and then electric motorcycles. .  
If everything goes well, 250 thousand units will be produced in the first stage and annual capacity will be increased to 500 thousand by 2025. Last year, 10 thousand pre orders were received. According to the Association of car manufacturers of Vietnam, 119.497 new cars were sold in the first 5 months of this year. This means an increase of 18% compared to the same period last year. 
Another important information on the news is that the entire car is not produced in Vietnam. The chassis belongs to Opel’s Karl Rock model. Sedan and SUV models will be produced on BMW’s platform. Design Studies were carried out by Italian Pininfarina. The engineering works of the components belong to Magna Steyr. 
The Vietnam economy has been growing at an average rate of 6.6% annually since 2000. National income per capita increased from $ 400 per year to $ 2,400 per year. Meanwhile, it is important to note that the Vietnam economy is not an open market economy , 70% customs duty has been applied in car imports since December 2015. ( www.export.gov/article=vietnam-trade-barriers)

My dear friends,

Watching the news about Fadil naturally brings to mind our domestic and National Car studies. Vietnam announced an investment of 3.5 billion dollars. Plus, Its economy is not open market economy like ours. They have protective barriers.
They keep the vehicle production standards high by considering exports. That’s why the sale price of Fadıl is about $ 17 thousand. All of this confirms that we will have a serious investment cost. Moreover, we have open market economy. Competition is much fierce in our case. We have to find export markets. That’s why we have to seek cooperation and more synergies. The Honda Gebze plant, which I insisted on before is worth recalling again.

See you in my next articles.

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