Therefore, MMV decided to assemble the car in Vietnam, which is VND200 million (over US$8,810) cheaper than those made in Japan.

This is seen as a bold move as other auto firms in Vietnam have scaled down or stopped assembly of certain models in Vietnam and shifted to importing completely built-up (CBU) autos from Thailand and Indonesia into Vietnam as the duty on CBU imports from ASEAN countries is down to 0% from last year’s 30%.

Outlander was first introduced in Vietnam in 2016 when Mitsubishi shareholders raised their ownership and renamed Vina Star Motors, the distributor of Mitsubishi vehicles in Vietnam, as Mitsubishi Motors Vietnam, Kenichi Horinouchi said.

Besides the lower price, the locally-assembled Mitsubishi Outlander is equipped with more modern facilities than the imported version.

The 2.0 CVT version is priced at VND808 million, the 2.0 CVT Premium at VND942 million and the 2.4 CVT VND1.1 billion. Meanwhile, the imported Outlander costs VND975 million for the 2.0 STD version, VND1.123 billion for 2.0 CVT and VND1.275 billion for 2.4 CVT, unchanged from last year.

All Outlander versions now have seven seats, so they are seen as direct rivals of seven-seat Honda CR-V cars. However, Honda has had difficulty importing CBU Honda CR-V autos from Thailand due to Government Decree 116. The decree stipulates that auto importers must have a written certificate or document proving that they are authorized to represent foreign auto manufacturers or assemblers to recall imported autos with defects. When granted an import license, importers must maintain business conditions and assure their fulfillment of liabilities involving warranty, maintenance and recall of imported autos in line with the decree.

The starting price of Outlander is only VND808 million, one of the most attractive prices of crossover utility vehicles (CUVs) in Vietnam.

All components for locally-assembled Outlander autos are imported from Japan and the assembly process is supervised by Japanese experts.

Outlander is Mitsubishi’s second model assembled in Vietnam after Pajero assembled in Binh Duong Province. The firm will continue assembling other models in Vietnam such as Xpander.

Kozo Shiraji, vice president of Mitsubishi Motors, earlier said the corporation would build its second auto assembly plant worth US$250 million with an annual capacity of 50,000 units from the middle of 2020.

The automaker expects to locate the plant in a developed industrial park or economic zone with convenient seaport access so that it could conveniently transport CBU autos and auto parts, Kozo Shiraji said.

Vietnam is one of the key markets for the corporation in the Southeast Asian region with low-cost and high-skilled labor.

Kozo Shiraji also proposed the Ministry of Finance exempt the duty on parts imports by its first plant in Vietnam from this year until the second plant is put into operation.

Previously, Mitsubishi Motors inked a memorandum of understanding with the Ministry of Industry and Trade of Vietnam to promote the use of electric vehicles in the country.

According to the Vietnam Automobile Manufacturers Association (VAMA), Mitsubishi Vietnam sold nearly 6,700 cars last year and over 6,100 units in 2016, a 9% market share.