In middle-income Vietnam, moneybags pay for extravagances in cash
In middle-income Vietnam, moneybags pay for extravagances in cash
In Vietnam, where GDP per capita was only around US$1,900 in 2013 according to World Bank data, it does not take much time for luxury cars, watches and mobile phones worth up to 237 times that income to find buyers.
The Southeast Asian country spent more than $1.55 billion importing cars in the first six months of this year, a massive 121.6 percent increase in volume and 186 percent in value, compared to last year’s first half.
The value of the imported cars was even double the figure in 2013.
Most of the whopping amount was spent on bringing famed luxury brands such as Audi, Jaguar Land Rover, Mercedes, BMW and even Lamborghini and Ferrari to Vietnam, according to local car dealerships.
For Vietnamese moneybags, buying cars worth billions of dong (VND1 billion ~ $46,000) is just like shopping for vegetables at a grocery store.
Lien A Quoc Te Co., the authorized distributor of Germany’s Audi cars in the country, recently launched a promotional campaign on Phu Quoc Island, off the southern province of Kien Giang.
Attendees were allowed to test out the four-door Audi A6 Ultra, worth more than $106,000, and three islanders placed an order for one sedan each shortly after the event.
“A Phu Quoc customer put down a VND20 million [$920] deposit at the event, and came back the following day with VND2.2 billion [$101,056] in cash to finalize the purchase,” Lien A Quoc Te general director Tran Tan Trung recalled.
Trung said his firm has plans to bring 15 Audi TT sedans, priced at least $95,000 each, to Vietnam to test the market.
“But we have received more than 22 orders within only one month,” he said.
As of mid-July, Lien A Quoc Te sold more than 380 Audi cars of all models, 80 units more than the count in the same period last year, according to the general director.
“We expect full-year sales of 710 units, compared to 600 last year,” he said.
A representative of the local importer of cars made by British firm Jaguar Land Rover said the company is expanding at a pace of more than 20 percent in Vietnam.
Jaguar Land Rover opened its second showroom in Ho Chi Minh City, and the fourth of its kind in the Southeast Asian country, last month.
Affluent Vietnamese customers have also placed orders for ten Mercedes-Maybach S600, worth around VND9.6 billion ($451,850) each, a local Mercedes representative revealed in May.
That price is 237 times the GDP per capita of Vietnam in 2013 ($1,900), just in case you may have forgotten it. On a relevant note, officials have projected that income to rise to $2,200 this year.
Mercedes is scheduled to make only 50 such luxury sedans this year, and a fifth of which will go to the Vietnamese market alone.
Last month Vietnam imported four BMW i8s, one Lamborghini Huracan, and one Ferrari F12 Berlinetta, whose manufacturer's suggested retail prices range from $130,000 to $320,000.
Extravagant timepieces, phones
Vietnamese with deep pockets are also fond of donning luxury watches and using fancy mobile phones, creating lucrative markets for imported products.
M.N., an attendant at a French luxury store in Ho Chi Minh City, said he had recently sold a watch worth nearly VND2 billion ($91,870) to a female customer, who already bought a VND4.7 billion ($215,893) watch just a few months ago.
The latest timepiece sold to her is the 31st out of 60 limited editions of the famous French brand, N. revealed.
“We had to temporarily close the store for a while and had all of the staff members count the cash she used to pay for the watch,” he said.
The attendant added his store receives around 20 customers on a daily basis, with up to 90 percent being Vietnamese.
“More than 40 percent of our customers usually place pre-orders and pay in cash,” he revealed.
With sales repeatedly soaring, the French watchmaker has added Vietnam to the list of “very potential markets,” whereas the Ho Chi Minh City dealership “has been praised for the achievement,” he said.
In the meantime, sales of deluxe Tag Heuer mobile phones fetching from VND150 million to VND500 million ($6,890-22,967) each in Vietnam posted a 20 percent growth rate in the first half of this year compared to last year, according to the authorized dealership in Vietnam of the Swiss company.
The firm could sell up to 20 devices during peak months and at least four to five handsets in off-peak ones.
“Even the cellphone Meridiist II, which costs VND480 million [$22,049] apiece, could find buyers shortly after it was unveiled [in Vietnam],” the representative said.
