Another is the country's currently protected market. Back in 1994, the Ministry of Heavy Industry (now Ministry of Industry) declared, with the help of a masterplan completed by Japanese powerhouse Mitsubishi, that "four or five" auto makers would be allowed to build joint-venture plants, with two of those slots reserved for US companies. Even if ASEAN free trade never materialized, the thinking went, there are few deals as sweet as access to the worlds 12th largest population contained by a highly protected market.
Suspending traditional American business instincts in favor of positioning alongside awakening Asian tigers, and with General Motors preoccupied in China with a $1.57 billion JV, in late 1995 the Ford and Chrysler logos quickly became potent symbols of the New Vietnam.

Drawn by the setting of a not-so-far-off auto market of 180,000, their neighbors have already moved in. First here, licensed in 1991, were two companies that weren't automakers at all, as much as businesses that were quick to identify Vietnams potential and lack of competition, Mekong Motors, which makes four-wheel drive vehicles assembled from South Korean parts, and Vietnam Motors Corporation (VMC), a Filipino JV which assembles and markets BMW 320is and 528Is, as well as South Korean Kia Pride compacts, and a broad line of Mazdas (Ford owns controlling interest in both Kia and Mazda.)
In the past two years, Mitsubishi, Mercedes, Toyota, Daewoo, Daihatsu, Honda, Nissan, Peugeot, Suzuki, Daihatsu, Isuzu, have all arrived, and will soon be producing 30 kinds of cars, trucks and buses.
Why are they here? Within the frame of Vietnam's current state-planned economy, the Ministry of Industry is aiming for 80,000 vehicles produced by the year 2,000, up from 24,900 units forecast for 1998. It knows that an industrialized country relies on the automotive sector for a tenth or more of its gross national product, including parts making.
According to the Ministry of Transport, there are currently about 400,000 autos on the roads, with about 10% replaced per year. For the last three years or so, fleet sales to government offices, state-owned enterprises, and joint ventures, as well as taxi fleets, have accounted for a substantial sector of the market, although the state has since limited their and others spending.
With much of that pork gone, market demand is becoming purer. This is causing several of the automakers to produce trucks, buses and vans in addition to cars. The likely first buyer, one might imagine, can be found today on a motorbike. In the past three years hundreds of thousands of the $2,000 to $4,000 vehicles, mainly 100cc Honda Dreams have all but replaced bicycles in the largest cities. That phenomenon was first rationalized by foreign marketers as the equivalent to investing in a commodity that can be resold at the same price. But today, increasing numbers of Dream riders are darting to boutiques that sell $150 shoes and $100 jeans -- in other words, they're becoming consumers. It is almost possible to forget, for a moment, that spots to park those shoes or motorbikes -- are found within the crowded alleyways beside the homes of these would-be car buyers -- than where the driveway would go.

Not every company is enamored with this picture. Chryslers retraction is perhaps the most profound. In late1995, automakers learned that none had been handpicked as one of the five to win exclusive rights to Vietnams market, but instead were each one of 15.
Shortly afterward, Minster of Industry chief Tran Minh Huan told the VBJ that "We are trying for an open market. Auto makers can stop working if they are unhappy, according to our foreign investment law." It also made sense to planners that a parts industry would grow more quickly around 15 plants than just a few.
After spending 1995 and part of 96 contemplating the market, Chrysler did. Its country representative moved to Thailand, marking the evaporation of one of the largest US invested projects, at $200 million, and probably the most sophisticated proposed auto facility. It would have featured stamping facilities that are only now starting to appear in Thailand's landscape of nearly 600,000 units in yearly sales.
For that company, smaller than GM and Ford and requiring profits of $1000 per car rather than $400, as with Ford, the company told the Ministry of Planning and Investment (MPI), which granted the license, there no longer the room in the pie for its finger.
A would-have-been competitor to Chrysler remarked, "I don't think you can go into a country moving toward a market-oriented economy then look for a monopoly."