New vehicle sales in Vietnam continued to recover in January 2024 from depressed year earlier levels, with sales rising by 19% to 16,697 units 13,998 units in the same month of last year, according to wholesale data released by the Vietnam Automotive Manufacturers Association (VAMA). The data excluded a growing number of non member brands.

That followed a 20% rebound to 36,350 in December 2023, the market’s first positive month in over a year, as economic growth in the country continue to accelerate. GDP expanded by 6.7% year on year in the fourth quarter, up from 5.5% in the third quarter and 3.9% in the first half of last year, driven by strong service sector activity helped by a rebound in the country’s travel and tourism sector.

Lending rates have come down since the central bank hiked its benchmark interest rate from 4% to 6% in late 2022, helping consumers recover from the Covid lockdowns.

Buyers rushed into the market at the end of last year ahead of the expiry of the 50% vehicle registration tax discount introduced by the ministry of finance last year to help support the local market, with dealers now offering discounts to offset this cost increase. For battery electric vehicles (BEVs) the registration tax has been cut to zero until 2026 while the special consumption tax has been reduced to between 1% and 3% as part of a broader package of government incentives to attract more BEV investment into the country including cuts in import duties on components and charging equipment.

Sales of passenger vehicles increased by 11% to 12,393 units last month, while commercial vehicle sales jumped by 52% to 4,304 units. The data does not include brands such as Mercedes-Benz, Hyundai, Tesla, Nissan, domestic startup VinFast and a growing number of Chinese brands that have entered the market in the last two years including BYD, Lynk & Co, SAIC Motor and Great Wall Motor.

Truong Hai (Thaco) group, the local assembler and distributor of Kia, Mazda, Peugeot and BMW-Mini and a major player in the commercial vehicle segment, reported a 16% rise in group sales to 5,443 units last month. That included a 14% increase in Kia sales to 2,369 units, a 17% increase in Mazda sales to 1,972 units and a 42% increase in Thaco commercial vehicle sales to 754 units.

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Toyota sales continued to fall sharply last month, by 27% to 2,208 units, in the absence of key models including the Hiace and Hilux light commercial vehicles. Ford benefited from this, with sales rising by 13% to 2,671 units driven by strong demand for the Ranger, Transit and Everest models. Honda sales rose by 23% to 2,023 units Mitsubishi 1,793 units (+57%) and Suzuki 1,594 units (+86%).

Separate reports showed Hyundai sold 3,569 vehicles last month after shifting 67,450 units in the whole of 2023, making it the country’s best selling auto brand.