Hanoi - A Ho Chi Minh City woman said Wednesday she had spent 1.3 million dollars to buy a Rolls-Royce and fly it to Vietnam before the Lunar New Year, or Tet, in a vivid illustration of the country's growing appetite for luxury goods. Real-estate tycoon Duong Thi Bach Diep said her custom-made car, a Rolls-Royce Phantom 2008, had arrived in Ho Chi Minh City on a China Airlines flight Tuesday night.
"I cried when I first saw it," Diep said. "All the security and customs officials at the airport shared the joy with me when it arrived."
Vietnam remains a poor country, with average annual incomes under 900 dollars per year. But the economy has grown at over 7 per cent annually since 2001, and foreign investment has flooded in.
Real estate prices in Ho Chi Minh City, where Diep's firm operates, rose 80 per cent or more in 2007, reaching thousands of dollars per square metre in downtown areas.
The new wealth has fuelled a taste for foreign goods, including cars.
"Vietnamese people are buying more and more expensive cars now," said Nguyen Thanh Binh, owner of an imported car dealership in Hanoi. "People's need to show off their wealth, in order to facilitate their business, is rising."
The need to show off is particularly sharp during Tet, when Vietnamese visit their families and friends to exchange seasons' greetings. The holiday begins this year on February 7.
Vietnam's monthly trade deficit hit a billion dollars in January, with car imports more than tripling year on year, to almost 50 million dollars a month.
The imports are driven in part by a drop in auto import tariffs to 60 per cent, required under the terms of Vietnam's entry to the World Trade Organization in 2007.
Eleven major auto companies, including Toyota, GM, and Mercedes-Benz, have manufacturing operations in Vietnam, established when import tariffs were over 200 per cent. With the new, lower tariffs, manufacturers say it is becoming more economical to import cars than to manufacture them locally.
Mercedes-Benz recently became the first auto manufacturer in Vietnam to acquire a license to import fully assembled cars.
"We are finalizing the procedures to import the first batch now," said Tran Tien Dung, deputy sales manager at a Mercedes-Benz dealership in Ho Chi Minh City. "I'm sure our sales will increase rapidly when we start selling imported cars. The demand for upscale cars in Vietnam is very high.
Vietnamese tend to believe imported cars and motorbikes are of higher quality than those manufactured locally.
Diep said her motives in buying the car had been partly patriotic.
"I'm so proud of the car," Diep said. "This will show the world that Vietnam is not a country of poverty and war, but a lucrative market."
