New vehicle sales in Vietnam rose by 13% to 21,769 units in May 2024 from 19,266 a year earlier, according to the Vietnam Automotive Manufacturers Association (VAMA).

The data did not include sales by Mercedes-Benz, Hyundai, Tesla and Nissan and a growing number of Chinese brands which have entered the market in the last two years, as well as domestic vehicle manufacturer VinFast.

The market looked to have found a bottom at the current low levels after last year’s sharp decline which followed an initial rebound from the Covid pandemic lows in the previous year.

Despite the government continuing to offer tax incentives last year, aggressive promotional campaigns by dealers and the central bank lowering its benchmark interest rate after hiking it sharply at the end of 2022, vehicle purchases by consumers and businesses remained sluggish while dealer inventories increased significantly.

GDP growth slowed to 5.7% year on year in the first quarter of 2024 from 6.7% in the previous quarter, held back by overall weak household spending.

VAMA data showed overall vehicle sales in the first five months of the year fell by 7% to 93,655 units from 100,733 a year earlier, following a weak first quarter, including an 11% decline in passenger vehicle sales to 66,905 units though commercial vehicle sales were 5% higher at 26,750 units.

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Local assembler Truong Hai (Thaco) reported a 13% drop in group sales to 29,756 units year to date (YTD) including a 20% drop in Kia sales to 11,133 units, an 11% fall in Mazda sales to 10,117 units and a 3% decline in Thaco commercial vehicle sales to 6,780 units.

Toyota sales were down by 20% at 17,160 YTD in the continued absence of the Hiace and Hilux light commercial vehicle models. Ford continued to benefit from this, with sales slightly higher at 14,344 units underpinned by the popular Ranger, Everest and Transit.

Honda sales increased by 13% to 9,100 units, Mitsubishi 11,709 units (+11%) and Suzuki 5,949 units (-11%).

Hyundai was the best selling auto brand in Vietnam in the first four months of 2024 with 14,420 deliveries.