Mercedes has been dominating Vietnam’s luxury car market in recent years, but that could start to change this year as BMW lowers prices.
“We have always considered BMW a major competitor in most markets globally, but things are different in Vietnam,” said CEO Brad Kelly on the sidelines of the launch of the new Mercedes GLC models in Ho Chi Minh City recently.
He added that in Vietnam, BWM does not yet seem to threaten Mercedes in terms of sales.
Between 2019 and 2022, Mercedes secured and average of around 60% of Vietnam’s total luxury car market share, and the German brand last year sold over 7,900 units alone.
Its competitor from the same country, BMW, only secured fourth place last year – behind Lexus and Volvo – with the sale of 973 units.
However, Thaco, the Vietnamese company that distributes BMW cars, has been assembling several BMW models, such as the 3 Series, the 5 Series, and the X3 and X5.
This implies that BMW wants to reduce its retail prices in Vietnam as assembling the vehicles locally will bring down costs.
The strategy seems to have succeeded as the BMW X3s assembled last year are now selling from VND1.8 billion ($76,700), compared to the new Mercedes GLC price tag of VND2.3 billion.
Thus, the cheapest luxury car in Vietnam now belongs to BMW, not Mercedes.
The rising competition with BMW therefore will benefit Vietnamese customers and the local auto industry, and it will motivate Mercedes to come up with more new ideas, Kelly said.