Will Vietnam's Car Prices Ever Fall?

By: City Pass Guide

It is said that a middle income Indonesian has to save all his/her salary (while not spending a penny) for almost six years in order to buy a new Innova imported to Indonesia. Guess how much time it takes his Vietnamese friend in order to realise the same dream? 17 years!1 What can explain this difference? One answer may be the higher average income in Indonesia.

The price of imported cars in Vietnam is almost two times higher than that in Indonesia. It should be noted that taxes and fees (which account for 40 - 50% of car prices in Vietnam) contribute largely to the fact that an imported car in Vietnam is more expensive than in other countries in the region.

Some will argue that as Vietnam participates in international trade agreements, which aim at the reduction of trade barriers, things may change. To name a few, besides the need to respect the WTO and the ASEAN commitments for some new cars, Vietnam also has to eliminate import tax if the car is imported from the European Union (EU) no later than 10 years after the ratification of the Vietnam – EU free trade agreement (FTA). If the car is imported from South Korea, import tax must be eliminated no later than 10 years after the ratification of the Vietnam – South Korea FTA. And of course, if the car is imported from TPP members, then import tax is eliminated no later than 10 – 13 years after the ratification of this agreement. Accordingly, people are sitting on their money, expecting the price of cars to go down.

However, it seems that we shouldn’t count too much on trade agreements, at least in the near future. It is necessary to note that import tax is only one of many elements which contribute to the high price of cars. Besides, while eliminating this tax, the government has a variety of instruments to restrict car importation and compensate the budget reduction, including non-tariff barriers (such as conditions imposed on car importers), fees and taxes. The luxury tax is an example. From the 1st of January, 2016, Decree 105/2015/ND-CP entered into force, ushering a new way of calculating luxury taxes imposed on imported cars that have less than 24 seats. The result has been that the luxury tax increased substantially, which meant an increase in the price of new cars.

What if you want to buy a used imported car? Remember that like many other countries, Vietnam doesn’t like used cars. Therefore, a strict quota on importation of used cars is applied. For instance, according to the TPP agreement, on the 16th year after the ratification of the agreement, only 150 used cars will benefit from the tax reduction. If your car is the 151st, you’ll have to pay the MFN tax prescribed by the Vietnam’s WTO commitments.

Are you bored of going to work by motorcycle? You have two options: (i) waiting for the price of cars to decrease through the reduction of taxes and fees or, (ii) work harder now to have much more money to buy it sooner. The second option sounds more realistic than the first. Oh yes, you may also have another option: wait for the metro lines to be finished (2019?). This sounds more realistic than the first one, too. And, of course, better for the environment.


1 Central Institute for Economic Management (CIEM) of the Ministry of Planning and Investment, conference related to the Situation and policy of development of car and spare parts industry in Vietnam, organized on the 8th of December, 2015.

Bamboo Airways Set to Disrupt Vietnam’s Aviation Norms

By: Mervin Lee

Vietnam’s Newest Airline Set to Take-Off in January 2019

Bamboo Airways is Headquartered in Phu Cat Airport Near Quy Nhon City

Will Quy Nhon be the Next Big Destination for Tourism?

Bamboo AirwaysImage source: samchui.com

Bamboo Airways, Vietnam’s newest entity in the country’s relatively saturated aviation industry, is planning to take-off to the skies for the first time on 16th January 2019, after failing to do so on two previously planned dates last year. The airline received the final green light from Prime Minister Nguyen Xuan Phuc and the Ministry of Transportation on 8 November 2018 after an intense meeting that saw the participation of several other core government organs.

An Airline with Headquarters in Central Vietnam

A subsidiary company of FLC Group JSC based in Hanoi, Bamboo Airways has its headquarters in Phu Cat Airport (IATA: UIH) of Binh Dinh Province. Phu Cat Airport serves most of the province and is approximately 35 km from Quy Nhon city, the largest city in Binh Dinh, known for its sandy shorelines and impressive geographical landforms. With 24 domestic routes and 16 international routes such as to Russia, Germany, Korea, China and Japan planned from now till 2023,

Bamboo Airways is exploring uncharted territory with its Hybrid Model. This purportedly combines the trustability of traditional full-service carriers and competitive pricing more commonly associated with low-cost carriers.

Bamboo AirwaysImage source: careerfinder.vn

Numbers not looking bright for Vietnam, aviation experts say

More easily said than done, though, based on observations by international experts.

An article published by Bloomberg on 1 August 2018 had a somewhat pessimistic view of domestic aviation market trends in Vietnam. Brendan Sobie, a Singapore-based analyst at CAPA Centre for Aviation, said to Bloomberg that “anybody coming into the market now is late”. According to Sobie, Vietnam’s annual domestic seat capacity growth has also been reduced to less than 10% in the last year or so. On a brighter note, he commented that international seat demand is increasing, with an estimated 20% growth annually in the last three years. This might explain Bamboo Airways’ ambitious plans to jumpstart its international route presence.

Trinh Van Quyet, chairman of Bamboo Airways, firmly believes that the growing middle class and its increasing desire to travel both domestically and internationally would bolster these numbers. Beyond its current inventory of 20 leased aircraft, parent company FLC Group JSC has commited to buying 24 Airbus SE A321 planes worth US$3.2 billion. In June 2018 FLC also finalised a contract with Boeing Co. for 20 twin-aisle 787-9 Dreamliners. Full delivery of these planes is expected in 2022.

Bamboo AirwaysImage source: vnmedia.vn

Real estate plans for Quy Nhon probably not just a coincidence

Perhaps not too coincidentally, FLC Group JSC is also a real estate developer. It recently announced a 600+ hectare real estate development with an estimated 70,000 resident capacity in Quy Nhon City. Located 19 km away from the city centre, Lux City Quy Nhon has been described by the developer as an eco-district that combines the natural characteristics of coastal Vietnam with the comfort of modern living. The self-sustainable eco-district is set to feature parks, clinics, mixed-used highrises, convention centres and several recreational facilities that exploit the province’s natural beauty. Much of the developer’s marketing material focuses on Quy Nhon’s connectivity to other major cities in both northern and southern Vietnam and Lux City’s suitability for retirement housing.

Evidently, with ticket deals linked to FLC’s resorts and golf courses on Bamboo Airway’s website, one might say that its entry to Vietnam’s aviation industry might be well aligned with Quy Nhon’s strategy to becoming the crown jewel of Central Vietnam.

Banner Image source: Bamboo Airways

Airfare from Vietnam to Cambodia Is Unbelievably Cheap

By: Keely Burkey

The sky is dark, but you can see a deep purple brightening in the distance. As the horizon becomes clearer, the outline of three mountainous peaks grows more distinct. You’re not looking at alpine tops: this is the sunrise over Angkor Wat.

The experience of watching the sunlight creep over the magnificent temple’s 900-year-old edifice is nothing short of breathtaking, and it’s no wonder the temple has been named one of the New Seven Wonders of the World.

And yet, it’s just one of Cambodia’s many attributes.

cambodiaImage source: backyardtravel.com

A country both beautiful and complex, and just mere hours away from Ho Chi Minh City by plane, this is a land ideal for a three-day weekend or extended vacation. And now that the country’s national flag carrier Cambodia Angkor Air has started offering once-in-a-lifetime airfares, the hardest part of the trip will be packing your bags.

Adventure, Closer than Ever

Phnom Penh. Siem Reap. Sihanoukville. Three cities similar in history, yet unique and distinct in personality. Where should you go next? Depends on what you’re after.

cambodiaImage source: wendywutours.com.au

You can’t experience everything Cambodia has to offer without exploring the country’s modern capital, Phnom Penh. Colloquially known as ‘The Charming City’, food, architecture and history meet in these streets for an unforgettable experience. No visit would be complete without perusing the stalls of the Central Market, taking a boat tour in the Mekong River and seeing a traditional Apsara dance performance.

cambodiaImage source: cambodialuxuryvacations.com

For first-time adventurers to Cambodia, you can do no wrong with Siem Reap. Steeped in history and embracing a modern charm, this city is adjacent to the Angkor Wat Temple Complex, yet the town itself is worth a visit as well. A mecca for backpackers and independent travellers, tourism has sprang up here leading to the creation of the town’s vibrant Pub Street and nightly food market. Here you’ll find a true mix of influences: part Chinese-inspired and with a touch of French colonialism, this city has a little bit of everything.

Looking for pristine beaches and seafood? It’s time to head to Sihanoukville. Take a tuk-tuk to the beach and experience crystal-clear waters without the crowds you’ll find in Danang or Phu Quoc. Embrace the small-town life here and do a bit of island hopping as you mingle with the smiling locals and watch the sun set below the horizon.

cambodiaImage source: pix10.agoda.net

Just a Dollar Away

As you head out for your next vacation, only a safe, reliable and inexpensive flight will do. As Cambodia’s national flag carrier since its establishment in 2009, only Cambodia Angkor Air checks all the boxes.

cambodiaImage source: c1.staticflickr.com

Fully accredited by the International Air Transport Association (IATA) and International Civil Aviation Organisation (ICAO), as Cambodia’s prominence in the tourism market consistently grows, so does Cambodia Angkor Air. By 2020, international flights will be added with destinations in China, Japan and South Korea. Now is your chance to to experience an authentic Cambodian adventure before the world follows suit.

And best of all? For a limited time, book a flight on Cambodia Angkor Air for unbeatable prices. An incredible promotion with starting prices as low as US$1.00 means that you’ve just sorted out your next international destination.

Video source: Matador Network

Where to Next?
Current Routes and Special Rates
Phnom Penh to Ho Chi Minh City: starting from US$1.00
Siem Reap to Ho Chi Minh City: starting from US$5.00
Sihanoukville to Ho Chi Minh City: starting from US$1.00
Siem Reap to Danang: starting from US$15.00

Visit CambodiaAngkorAir.com for more information!

Banner Image source: dfdl.com

When, How to Fix Your Bike in Vietnam

By: Jesus Lopez Gomez

Just by the law of averages, if you’re reading this and living in Vietnam, you are likely one of the country’s millions of motorbike owners.

GIF source: giphy.com

If you’re a foreigner, this might be the first two-wheeled, motor-powered transport you’ve ever owned. As such, your approach to maintenance may be to just drive it around until you hear it make a weird sound.

While that’s not the best way to learn about the needs of your bike, a change in sound can be an important first signal that your bike needs attention from a professional, mechanic Duong Brooks said.

“It might be a bad engine. If the sound is really loud, it might be a piston”, he hypothesised. “Or you’re losing oil more quickly than normally.”

MotorbikesImage source: i.kinja-img.com

Brooks, the co-owner of Binh Thanh district motorbike garage DC Motorbikes, said excess or abnormal noise from a bike might mean a variety of things, most of them bad.

“The most important thing is … it may cost you a lot of money”, he said.

To avoid a costly and unplanned visit to the mechanic, Brooks said motorbike owners should hew to a schedule of routine mechanic visits to get basic repairs done. Find a mechanic you can trust near you and start developing that relationship. Brooks said most are knowledgeable and priced fairly.

And while you can’t avoid driving in the rain, you should take care of your bike if you plan on braving a downpour in a poncho on two wheels. Drive slow as the tires and road will have a thin layer of water between them reducing the grip of the rubber.

MotorbikesImage source: dantricdn.com

Also, avoid flooded roads. If rising waters from the road enter your exhaust, you may have a pricey repair on your hands.

Undeterred? Depending on how much water got into your bike and how badly it was damaged, the repair for this issue may go as high as VND2 million.

All things considered, let’s be frank: if you’re an inexperienced motorist, a first-timer on two wheels or someone with limited Vietnamese, you’re more than likely going to avoid the mechanic until absolutely forced to go. Maybe your bike just inexplicably shut off in an unfamiliar part of town.

What do you do in that situation?

If you’ve been in town for any more than a few weeks, you’ve likely see two motorbikes riding in tandem, with one pushing from behind with the driver’s foot on the other’s passenger foot pegs. One option is to summon a Grab to do the same for you.

But where do you go? What garage should you select?

Thankfully, the high saturation of motorbikes means a sua xe, or “bike repair shop”, is never far away. Ask for directions. If you’re in the city, you likely have your pick of garages.

MotorbikesImage source: spadaforaphoto.com

Great, but how do you tell the good ones from the bad ones?

Motorbikes are complex, but this issue need not be. Brooks said look for the telltale sign of many customers. A busy garage with plenty of bikes and business may be a safer bet than one with less business.

Service Frequency
Oil change Every 1,000 km
Brakes Every 3 months
Gear oil change Every 2 km
Battery Every year

Banner Image source: spadaforaphoto.com

FAA Gives Nod to Vietnam Aviation Authorities for Direct Flights to US

By: Alex Gordillo

• Vietnam has been granted a Category 1 Rating

• Vietnam was recently named “Asia’s Leading Destination”

• Vietnam-US direct flights could cost Vietnam Airlines up to US$30 million yearly

In anticipation of the US-North Korea Summit taking place in Hanoi at the end of February, it appears as if the universe has tried to make Donald Trump’s trip a bit easier by approving direct flights from the US to Vietnam.

In a statement released on 14 February 2019, the Federal Aviation Administration—FAA, a branch of the U.S. Department of Transportation (DOT)—announced an Aviation Safety Rating for Vietnam which rates the Vietnamese Civil Aviation Authority as meeting the FAA’s international safety standards. Perhaps as a Valentine’s nod to Vietnamese-American couples and lovers, the Valentine’s Day announcement granted a Category 1 rating under the agency’s International Aviation Safety Assessment (IASA) program.

us vietnam flightsImage source: wanderlust.co.uk

This rating means that the Vietnamese Civil Aviation Authority has met the International Civil Aviation Organization (ICAO) standards for licensing and is based on an FAA assessment conducted in August 2018. According to the FAA’s press release, the ICAO is the United Nations’ “technical agency for aviation that establishes standards and recommended practices for aircraft operations and maintenance”.

us vietnam flightsImage source: modoho.com.vn

Although flights between Vietnam and the US have sold for as low as $515, no direct flights have taken place between both countries in recent history and the FAA had not previously assessed Vietnam’s civil aviation authority for compliance with ICAO standards. The move could represent yet another stepping stone for Vietnam to join the world stage in the tourism industry.

Last year, Vietnam was named “Asia’s Leading Destination” at the 2018 World Travel Awards in Hong Kong. Likewise, Vietnam National Administration of Tourism (VNAT) representatives attended the 39th International Tourism Fair (FITUR) in Spain in January. Vietnam’s Deputy Transportation Minister Nguyen Ngoc Dong was enthusiastic about the news when he told Reuters on Friday that the rating was a “recognition by a very developed aviation authority which requires a very high standard of safety and security”.

us vietnam flightsImage source: indochinadaytours.com

According to Tuoitre.vn, Vietnamese government data shows that Vietnam’s rapidly growing aviation market saw an increase of 16 percent on average yearly from 2010 to 2017. VNExpress reports an 11.9 percent growth in the number of travellers visiting Vietnam from the U.S. in 2018. That’s 687,000 people; a figure attributed to Vietnam’s Ministry of Culture, Sports and Tourism.

According to Brendan Sobie, a Singapore-based analyst at the CAPA Centre for Aviation, international seat demand in Vietnam is increasing, with an estimated 20% growth annually in the last three years. According to various news sources, several Vietnamese airlines—including Bamboo Airlines, Vietnam Airlines, and Vietjet—have expressed interest in establishing direct flights between both countries.

us vietnam flightsImage source: pinimg.com

Even so, the excitement about the news is not uniform. Tuioitre.vn also reported that, according to Duong Tri Thanh, general director of Vietnam Airlines, the Vietnam-US route could cost the airline a projected yearly loss of US$30 million. Sobie seems to agree. He recently told Bloomberg that “it’s very hard to make that route profitable. It’s a license to lose money”.

Whether or not airlines are prepared to take on the new baggage, so to speak, only time will tell what margin of profit Vietnam’s aviation giants will take. What is clear is that direct flights are sure to be a convenience to travellers from both countries, cementing a cross-cultural dynamic that continues to develop between both nations. Likewise, it will continue to facilitate travel for scores of people of Vietnamese origin living in the US—over 1.8 million according to the 2010 census.

Banner Image source: xotours.vn

A Quick Look at the Future of Aviation, In and Out of Vietnam

By: Mervin Lee

Vietnam’s economy is growing fast. Prime minister Nguyen Xuan Phuc expressed optimistically that GDP growth in 2018 may even hit 6.7 percent, a consistent increase over 2016 and 2017. With heightened foreign investment comes an Achilles heel that needs to be mended as quickly as possible: demands in aviation have risen starkly and the government is scrambling to improve pre-existing infrastructure and create new solutions.

In the vibrant South, the beloved but rather antiquated Tan Son Nhat International Airport (IATA: SGN) has served Ho Chi Minh City since the 1930s.

Airports in VietnamImage source: davidhkmwp

To ease traffic flow to the Saigon airport, talks to begin construction of the planned Long Thanh International Airport (IATA: LON) in neighbouring Dong Nai province have restarted

Upon full completion, Long Thanh International Airport hopes to handle 100 million passengers and five million tons of cargo annually.

Mr Thanh, lead designer for a local architectural firm, agreed that a new international airport would definitely reduce Tan Son Nhat Airport’s current strain. He was, however, concerned about the distance between the newly proposed airport and the CBD.

“The distance may not be an issue for international flights, but it’s not going to be feasible for domestic flights,” he said.

“I think they need to build a metro to connect Saigon’smain city area and Long Thanh airport.”

In a similar tune, construction of the nearby Phan Thiet Airport (IATA: PHH) continues and the initial completion estimate of 2018 has been delayed till 2020. Phan Thiet Airport is approximately equidistant between Phan Thiet City & the popular beach resort town Mui Ne.

The beach resort cities in central Vietnam are also expecting a renaissance in terms of aviational convenience. Cam Ranh International Airport (IATA: CXR) which serves both Cam Ranh Bay and Nha Trang City is ready to open a newly built international terminal. Tourist arrivals from China have risen 400 percent between 2016 and 2017 and local authorities hope that a new terminal will handle arrivals more effectively and attract new direct-flight routes from other countries. Currently, direct flights from Kuala Lumpur and Incheon are available along with seasonal flights from a number of cities in China and Russia. The new terminal is planned to expand the coverage to other promising locations such as Singapore and Japan.

Airports in VietnamImage source: lj-asia.com

In march this year, the Municipal Committee Secretary of Da Nang, Mr Truong Quang Nghia, expressed his concerns about increased air traffic during a meeting with the Ministry of Transport. Air travel arrivals to Da Nang City have been increasing steadily at 38-40 percent per annum. Based on this prediction, Da Nang International Airport (IATA: DAD) will reach its maximum annual capacity of 30,000,000 arrivals within two years. In November last year, Da Nang hosted the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Week and expects foreign investment to increase rapidly in the near future.

Further north in Hanoi, numerous policy-makers have been voicing the urgency to conduct land clearance and acquisition in advance even before conclusive plans for expanding Noi Bai International Airport (IATA: HAN) are made.

Airports in VietnamImage source: thudogroup.vn

“If the government does not invest in the expansion of Noi Bai Airport within three to five years there may very well be a major crisis,” said Hanoi’s Municipal Committee’s Deputy Secretary and Chairperson of Hanoi’s People’s Committee, Mr Nguyen Duc Chung.

“As such, Hanoi suggests that land acquisition should occur a step ahead of expansion plans for convenience of investment and as well as for cost-saving reasons,” he said.

In a similar mood, authorities of Hai Phong province are urging VietJet Aviation Joint Stock Company, commonly known simply as Vietjet Air, to proceed with the investment for the expansion of Cat Bi International Airport’s (IATA: HPH) Terminal 2. VietJet operates a majority of flights inbound & outbound of HPH with numerous domestic destinations and regular flights to Thailand & Korea. Vietjet is slated to provide 30% of the grand 6000 billion VND that will be utilized for this expansion.

Not too far away in Bai Tu Long archipelago which neighbours the world-famous UNESCO Heritage Site Halong Bay, Van Don International Airport (IATA: VDO) is entering the final stages of phase 1 construction and authorities are estimating it be fully-operational in October this year. Van Don District is amongst one of three regions in Vietnam which have been selected to be an SAEZ (Special Administrative & Economic Zone) since December 2016 alongside Phu Quoc Island & Van Phong Bay. All three selected SAEZs boasts beautiful landscape & strategic geographical placement which are seen to be ideal for economical development.

Airports in VietnamImage source: travelvietnam.com

Plans to revive the unused Na San Airport (IATA: SQH) which serves Son La Province have been officially abandoned earlier this year. As such, Dien Bien Phu Airport (IATA: DIN), 110 km away from Na San Airport, will remain the sole choice of domestic air travel for most inhabitants who reside in the large northwestern province.

Currently, Vietnam has a grand total of 21 active airports serving both international and domestic flights. Vietnamese authorities hope to raise this number to 28 in 2030. With discussions of the semi-mythical 1500-km North-South High Speed Rail project resurfacing, will Vietnam’s domestic aviation plans remain cast in stone? Time will tell.

Banner Image source: thanhnien.vn

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