“Don’t follow! Be followed!” is Mercedes Benz Vietnam’s motto. The German car manufacturer first opened a factory in Ho Chi Minh City in 1995. The company is now a treasured part of the Vietnamese landscape. Tourists are carted around in Mercedes minibuses, and it is becoming more and more realistic for wealthy Vietnamese to fulfil their dream of buying a German luxury car.
Producing dream Mercedes cars in Vietnam
There is a crashing sound. Two women and 15 men look on entranced, as the trainer, Gavin, races down a wet and slippery track and brakes suddenly between two pylons.
All wearing identical baseball caps -- all with the Mercedes Benz logo -- they are taking part in Mercedes Benz’s “Driving Experience”. The firm has reserved the national stadium in Hanoi for a whole week to train interested customers. After the demo, the trainees will have to get behind the wheel themselves.
Some are naturals, like Ta, for instance, who, despite the slippery surface, never lost control of the wheel and came to a perfect stop.
Improving road safety
Although Mercedes offers the course in a bid to sell cars to Vietnam’s top earners, they also have road safety courses for the rest of the population.
Udo Lörsch is the firm’s manager in Vietnam: “We do quite a lot to improve road safety. For example, we offer safety training courses for taxi drivers and transport firms along with the People’s Committee. We also work with the police.”
There are over 12,000 road traffic deaths a year in the country of 84 million inhabitants.
Mercedes Benz in Ho Chi Minh City
Mercedes Benz’s plant is in Ho Chi Minh City in southern Vietnam. It has about 500 employees including six Germans in management positions.
In the production hall, cars and minibuses that are ready to go on sale roll off the assembly line. None are completely “made in Vietnam,“ however, explains Lörsch: “We import our parts from Germany. We don’t only do assembly here though, we also weld and varnish. We’re not allowed to only do assembly.”
Mercedes Vietnam does not only produce for the export market but for the home market too, which is developing slowly but steadily.
Assembly in Vietnam to avoid high customs duties
In 2005, 170 vehicles were sold. This figure doubled in 2006. And in 2007, 600 were sold. The firm hit the 1,000 mark in 2008. About 1,500 commercial vehicles are sold annually.
An average wage at Mercedes Vietnam is 180 US dollars a month. But low wages are not the reason why the company assembles cars in Vietnam, according to Lörsch: “We only do it because of the customs duties, which are very high for finished cars.”
“These countries -- Vietnam, Thailand, Malaysia and Indonesia -- are trying to build up their own auto industry and that can only work with customs duties. But the duties are lower if we manufacture here.”
Back in Hanoi, the situation is tense. The participants had to take a written test after the practical part and now they’re being awarded a certificate. There’s also a prize for the best driver of the day and for those who improved the most.
This honour goes to Mrs Zang, who’s amazed: “Ha ha, it was great! Like Disneyland…”
The engineer belongs to the group of potential new customers. At the moment, she drives a Honda Civic but one day she hopes to be behind the wheel of a Mercedes Benz: “Maybe in the future,” she laughs.