Thailand has emerged as the new champion in the Vietnamese car market with a 30 percent share, thanks in most part to a new regional free trade agreement that has cut import tariffs and lowered prices.
Statistics from the General Customs Department showed that more than 7,800 cars made in Thailand were sold to Vietnam in the first three months, up 64.5 percent from a year ago.
The cars, worth around US$140 million, helped Thailand surpass China and South Korea in the Vietnamese market for the first time.
Car imports from South Korea dropped 41 percent and China 58 percent from the first quarter last year, in terms of units.
Thailand has surged as a major car production base in the region thanks to huge Japanese investment. The country was the fourth biggest car seller to Vietnam last year after China, South Korea and India.
A source from the finance ministry said the market shift is a result of a new free trade agreement among the 10 members of the Southeast Asian bloc ASEAN, under which car import tariffs have been cut from 50 percent to 40 percent this year.
The rate will continue to go down to 30 percent next year and zero in 2018.
Vietnam imported more than 19,700 cars in the first quarter, down 21 percent. The total value was $486 million, down 17 percent from the year-earlier period, according to customs data.