Mahathir officially launches Proton Car in Vietnam
Mahathir officially launches Proton Car in Vietnam
HANOI (AFP): Malaysia's Proton car was officially launched in Ho Chi Minh City on Saturday at a ceremony attended by visiting Malaysian Prime Minister Mahathir Mohamad at the end of a three- day visit to promote economic relations with Vietnam.
Shunroku Atarashi, general director of Vinastar Motors Corp. in which state-owned Proton has a 25% stake, said the launch of the five-seater Proton Wira 1.6 is the company's first passenger car designed for the Vietnamese market.
Vinastar has a US$16 million joint-venture auto assembly plant which began producing Mitsubishi vans and small trucks last year.
Vinastar's other foreign partners include Japan's Mitsubishi Motors Corp. and Mitsubishi Corp., which both own 25% stakes. Local partner Tracimexco under the Ministry of Trade and Commerce holds the remaining 25%.
Affluent
At a price of about $30,000, the Proton is beyond the reach of all but the most affluent in Vietnam, where annual per capita income is just $250.
Atarashi said he did not expect to sell more than a hundred vehicles this year.
Vinastar was one of the first four auto joint ventures to receive a license, getting the green light from the then State Committee for Cooperation and Investment in 1994, basing its business projections on the belief that no more automakers would be allowed to set up shop in Vietnam, he said.
However, there are now 10 joint-venture auto projects licensed in Vietnam, including Japanese firms Suzuki Motor Corp., Isuzu Motors Ltd., Daihatsu Motor Co. Ltd., Toyota Motor Corp. and Mitsubishi Motor Corp.
Mercedes-Benz of Germany is also building a plant in Ho Chi Minh City while South Korea's Daewoo Motor Co. Ltd. and U.S. firms Ford Motor Corp and Chrysler Corp. have been licensed to build plants assembling a wide range of vehicles.
French automaker PSA Peugeot-Citroen and a subsidiary of Malaysia's MBF group have signed a joint venture deal with Vietnam Forestry Machines company that is awaiting its license, as is another deal by South Korean firm Hyundai Corp.
With such a crowded field of automakers chasing Vietnam's tiny market -- total demand for passenger cars currently is estimated at about 4,000 -- Atarashi says he is not optimistic about the short term prospects for the industry.
"There are so many newcomers who will start production. At this moment the market cannot consume so many units so it is quite difficult for us to survive," he said.
In 1996, the government has set an import quota of just 5,000 passenger cars, either in completely knocked down kits or fully assembled. Auto analysts say that even this figure exceeds current market demand.