Sales of economy cars, once the backbone of the local auto industry, are lagging as luxury models gain ground in the Vietnam market, industry players say.

Vietnam a growing market for luxury cars.

According to a report from Lao Dong Newspaper, many car marques imported from China and India have disappeared from the local market or are now experiencing sluggish sales, but luxury vehicles continue to gain ground, despite prices in the tens of billions of VND.

Economy car sales boomed in Vietnam some six years ago, the local car market was riding high, fuelled in part by the growing stock market. New entrants then were the Cherry, Lifan and BYD, and importers promoted cars on the basis of affordability and good design.

The report said that but within a few years, economy sales slowed, despite low prices of between VND180 million (USD8,570) and VND300 million (USD142,800) as buyers became concerned about quality. Buyers also began to focus on high-end models, concerned about resale values. Cars became more than just a means of transport. They had become a mobile asset.

Hardest hit were cars from China, India and South Korea.

Plans to assemble India's Tata Nano, touted as the world's cheapest car, in Vietnam were shelved two years ago because of the shift in buyer trends.

High demand for luxury cars

The market of luxury cars has grown. In 2014, four new brands have appeared in Vietnam -- Bentley, Jaguar, Infiniti and Mini.

A representative from Audi distributor in Vietnam said sales of Audi have maintained high growth in Vietnam over the past five years. During the recent four-day Vietnam Automobiles Exhibition, Audi sales reached a new high. Mercedes-Benz also attracted a large number of buyers at the event, with 560 cars sold, despite a sticker price of billions of VND.

With the tax on imported cars expected to be reduced to zero in 2018, auto sales representatives are confident of a lucrative market in luxury cars.