Vietnam's bikers race to upgrade as auto sales explode
By Mai Nguyen
HANOI (Reuters) - Hoang Hai turned his back on a Vietnamese business that was headed for bankruptcy and became a driving instructor instead. Now he is riding a wave of interest in car ownership as the country's trend-setting middle class swaps two wheels for four.
The Hanoi driving school where Hai works is inundated with people eager to get behind the wheel. About 300 have applied each month so far this year, double the rate in 2014.
Hai, 45, says at least eight out of 10 learners don't own a car, but they all want one. "As soon as there is an intention to buy a car, they'll take a driving lesson," he said.
Famous for its swarms of scooters, Vietnam is seeing auto sales surge amid the rapid expansion of a young, style-conscious middle class after 15 straight years of economic growth of over 5 percent.
While major regional car markets Indonesia and Thailand saw annual declines in auto sales last year, Vietnam's leapt 43 percent, Vietnam Automobile Manufacturers Association (VAMA) data shows. Toyota, Mercedes-Benz, Ford and Honda reported solid annual sales increases, despite high import taxes.
The number of households in Vietnam with financial assets of $100,000 to $2 million will soon be among the fastest-growing in the world, according to Economist Intelligence Unit research, fuelling luxury vehicles sales in a country where gross domestic product per capita is still only about $1,500.
Porsche Cayennes and Bentleys can nowadays be seen jostling with budget cars and scooters on the chaotic boulevards of Hanoi and Ho Chi Minh City.
BMW says its sales in Vietnam since 2007 have jumped an average 20 percent to 30 percent annually, with more units sold in the past two years than the more populated Philippines, though still far behind more developed Thailand and Malaysia. Continued...