Automobile importers hit hard by recent scandals

12:00 | 31/08/2017

The imported automobile market in Vietnam have had numerous disturbances after the scandal of the official BMW distributor importing its newly introduced BMW 320i Sport illegally as well as the withdrawal of the official Renault distributor.

Auto Motors Vietnam, the authorised dealer of Renault, is preparing to withdraw from the country altogether

Due to consecutive losses in business operation, Auto Motors Vietnam, the authorised distributor of Renault, has narrowed down its operations and wants to transfer its distribution rights to other businesses in order to withdraw from Vietnam.

According to newswire Lao Dong, automobile sales, particularly imported units, has seen a plunge, impacting Auto Motors Vietnam’s revenue to a degree that the company now wants to withdraw from Vietnam after seven years of operation.

The company sold out the remaining automobiles and stopped importing new units, while simultaneously looking for a partner to transfer the distribution rights before they withdraw from Vietnam.

At present, the company’s showrooms in Ho Chi Minh City are closed. Regarding the showroom in Hanoi, it has stopped sales and is completing the procedures and supplying services for passengers who previously bought automobiles.

Auto Motors Vietnam started to distribute Renault automobiles in mid-2010 and grew its distribution system rapidly. However, Renault is in the high-end automobile segment with high prices, thereby, after a short time under sales pressure, the company was forced to cut prices of some models by hundreds of millions of dong.

Auto Motors Vietnam is a 100 per cent foreign-owned company and a subsidiary of Jean Rouyer Automobile based in Cholet, France.

Since 2010, Auto Motors Vietnam is the exclusive importer of Renault in Vietnam. With five showrooms in Hanoi, Ho Chi Minh City, Vinh city in the central province of Nghe An, Pleiku city in the Central Highlands province of Gia Lai, and Buon Ma Thuot city in the Central Highlands province of Dak Lak, Renault offered customers a range of six models - Renault Koleos, Renault Duster, Renault Latitude, Renault Logan, Renault Megane, and Renault Sandero.

The company planned to continue expanding its showroom network all over the country.

Regarding Euro Auto Corporation (EAC), the authorised distributor of BMW, the General Department of Vietnam Customs decided to stop clearing Euro Auto’s imported BMW units from December 1, 2016 after discovering signs of smuggling and trade fraud. However, earlier in May, EAC introduced a new model and handed over numerous units to customers.

Euro Auto had been found using fake papers, including contracts, invoices, packing lists, and certificates of quality (C/Q), to import BMW car units to Vietnam.

However, in earlier June, EAC confirmed that it was not importing its newly introduced BMW 320i Sport illegally and neither did it commit tax fraud.

After this scandal, EAC’s revenue also plunged. According to newswire Giao Thong, at present, EAC’s business operations are sluggish as customer demand is low. Almost all of EAC’s sellers left.

Ha Vy

VIR