Japanese crisis squeezes Vietnam's weak auto market

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Vietnam's supply of Japanese cars thinned after the recent disaster halted vehicle production and disrupted the delivery of parts to manufacturers around the world.

Toyota, Honda and Nissan have suspended operations pending damage assessments at their production plants following the March 11 quake, which killed thousands and rattled the infrastructure of the world's second-largest auto producer.

A representative from Toyota Vietnam said that the delivery of Japanese automotive components has slowed, complicating production here. Last week, representatives from the firm vowed to keep production on schedule, so that the local supply would not be seriously affected.

Following that statement, however, an engineer from Toyota Vietnam publicly charged that local production managers had ignored his warnings about significant flaws on some 60,000 cars. Toyota Vietnam responded by saying that the cars would not be recalled. They described the technical flaws as minor.

Honda Vietnam sold less than a tenth of Toyota's take in February a mere 283 units. Local retailers complain that they're also facing difficulties in keeping supplies up.

Nguyen The Ngoc, of the Honda Giai Phong Sales Department, said that orders for certain spare parts and vehicles have not been fully met.

"Certain vehicles, like the bestselling Honda CRV, are totally gone," he said. "There could be some issues where customers do not get the exact vehicle that they want."

Nevertheless, Ngoc said that the crisis has hurt car assemblers and producers, in Vietnam, far less than importers.

"Imports have become a very difficult game," said Dinh Xuan Tung, a salesman at VietAuto a local car dealership which mainly deals in Toyotas, Hondas, Mazdas, and Nissans manufactured in Japan, Taiwan and the US.

"Last week's order for 12 Japanese-made Toyotas and Nissans may have to be canceled," Tung said, adding that vehicle production in South Korea, Taiwan and the US has also been affected by the disruption.

"We used to import Japanese vehicles, every month. Now, they're hard to get," he said. "We have to order in parts from outside traders, whose imports are already en route to Vietnam. However, we've only managed to pull in 1-2 vehicles."

Delivery schedules have been compromised, as well.

"Vehicles used to be delivered within a month," Tung said. "Now, we've waited one and a half months, or even longer."

He added that his firm is considering importing more Korean vehicles.

"South Korean products have also sold well in Vietnam," Tung said, adding that, since last week, the price of certain imported vehicles has increased by $200-300. "Meanwhile, delivery only takes between 15-20 days."

Car sales in Vietnam in February rose by 56 percent from a year ago to 7,889 units, according to the Vietnam Automobile Manufacturers' Association.

However, several dealers complained that sales are weak and recent events have only made matters worse.

Cao Thi Thanh Thuy, of the Auto World Car Dealership, said the higher exchange rate has kept people from buying cars.

"Car sales now are very slow," he said. "We sell about 20-30 vehicles a month."

Others complained that the scarcity has failed to boost sales in what is shaping up to be a rather lackluster first quarter for the Vietnam's car market, compared to the previous quarter.

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