Ford Vietnam, for instance, has sold nearly 1,300 units of the global small car line Fiesta debuting this May on the local market as of now. The compact model's contribution raised the company's total number of vehicles sold in the January-September period to 6,060 units, or a rise of 39 percent year-on-year.

Laurent Charpentier, managing director of Ford Vietnam, said the Fiesta model has quickly become the firm's leading car line thanks to its fuel efficiency and smart technologies.

Meanwhile, Toyota Vietnam has launched into the market the Yaris car line imported from neighbouring Thailand since March. Although still exploring the market, the company has sold 784 Yaris cars as of October-end.

Still, the firm's compact car model Vios recorded the strongest consumption. Over 4,640 units of this line were sold in ten months.

However, the leading model on the small car market should be Kia Morning assembled and distributed by Truong Hai Auto Joint Stock Co, better known as Thaco. According to the statistics of the Vietnam Automobile Manufacturers Association (VAMA), some 5,530 Kia Morning cars were consumed in the first ten months of the year, which explained why Thaco in some previous months surpassed Toyota Vietnam to become the leading auto firm on the local market.

Obviously, the small car lines are being consumed stronger in the Vietnamese market. The compact fuel-efficient vehicles are suitable in crowded urban areas.

To catch up with this trend, other auto firms have invested to bring small car models to Vietnam.

Vina-Mazda as the official distributor of Mazda Japan after a short period importing cars to explore the market has opened the first assembly factory in Vietnam at the Chu Lai Open Economic Zone in Quang Nam Province.

Notably, Vina-Mazda chose the compact car line Mazda 2 as the first model to be assembled in the factory, planning to turn out 500 units from now to the year's end and 2,000 units in 2012.

Meanwhile, GM Vietnam, the new name of Vietnam Daewoo Motor Co. from September, saw a good consumption of the small car model Spark with nearly 2,880 units sold as of last month. After the rename, GM Vietnam also released the Mini Spark model.

Hyundai Thanh Cong, distributor of Hyundai Korea, also has joined the competition with Hyundai i10.

The Saigon Times Daily - November 11, 2011

Local car sector In slow lane

It is hard for local car industry to attract more foreign investment even when Asia's major car manufacturing base Thailand is hardly hit by ongoing drastic floods.

On October 31, 2011 Honda Japan plans to curtail half of automobile production in the US and Canada, while halting production at its Philippines-based plant in the aftermath of the Thai floods.

In Vietnam, Honda Vietnam thought of revising its automobile production plans from November.

Vietnam's top car manufacturer Toyota Vietnam (TMV) also made public plans to scaling down manufacturing of multi-purpose vehicles Innova and Fortuner.

A senior industry expert assumed it was rather difficult for the country to woo further foreign capital into the industry though scores of Thai car and spare part manufacturers were hardly hit by creeping drastic floods and it could take time and a big chunk of money for restoration.

So why has the car industry lost attraction to foreign car manufacturers?

Most recently, Toyota Motor Japan decided to pump $250 million for production expansion in Indonesia. The core reason was huge consumption in this market which stands at around 750,000 car units at present and around one million units per year in the near future. Meanwhile, car consumption is forecast at around 150,000 units in Vietnam in 2011, the same as 2010.

"Another key factor was Indonesia having a highly developed supporting industry which remains below par in Vietnam," said TMV's general director Akito Tachibana.

TMV made no effort to increase its vehicles' localisation rate from 2008 until present.

"We once thought of expanding Innova production. However, with constant policy changes, particularly excise tax imposition from April 1, 2009 we scaled down Innova's production by half to 7,500 units in 2010 against 16,000 units in 2008," said Tachibana.

"TMV, like other foreign-backed car manufacturers operating in Vietnam, aspire stable policies to expand our footprints in the country," the top executive asserted

Vietnam Investment Review - November 11, 2011