HCMC - Daehan Motors, a wholly South Korean-owned enterprise, announced on April 26 to enter Vietnam’s auto market by introducing three models of light truck named Teraco which are assembled in HCMC.
Daehan Motors has invested to build its first factory in the Automotive-Mechanical Industrial Park in Hoa Phu Ward in Cu Chi District. With a total investment of US$20 million and a total area of more than 132,440 square meters, the facility can turn out 20,000 units a year.
According to Nguyen Hai Trung, chairman of Daehan Motors, the stringent production process of the factory will help ensure product quality.
At present, the localization rates of three Teraco truck models, including Tera 190 (load capacity of 1.9 tons), Tera 230 (2.3 tons) and Tera 240 (2.4 tons) are 20% to 25%.
Trung said Daehan Motors has planned to raise its localization rate to 40% in the coming time to reduce prices and increase competitiveness to enter ASEAN markets.
Although Daehan Motors is a Korean firm, it has no products sold in South Korea. Meanwhile, Teraco is an auto brand that Daehan Motors builds for Vietnam’s market and its first three models are equipped with Hyundai and Isuzu engines.
Trung said Daehan Motors has targeted to develop a variety of products, including commercial vehicles and mini autos. However, as the light truck market in Vietnam is growing well, the company will focus on this segment first.
According to data of the Vietnam Automobile Manufacturers Association (VAMA), in 2016, the total number of trucks sold in Vietnam reached over 84,000 units, an increase of 22% over 2015, and more than 50% of trucks sold were under-five-ton ones. The light truck segment was forecast to maintain 20% annual growth in the coming years.
However, Daehan Motors looks to sell about 5,000 units in the remaining eight months of 2017. Individuals, households, small and medium sized enterprises providing transport services, professional logistics companies and start-ups with limited capital are identified as the company’s main customers.
Daehan Motors said the reasonable prices and good quality will be the competitive advantage of the Teraco brand against competitors in the same segment. The company is developing its distribution system throughout the country, focusing on the provinces that have great potential transportation needs.
Daehan Motors commissions first auto factory in HCMC
