New vehicle sales in Vietnam fell by 15% to 26,439 in November 2023 from 31,186 units a year earlier, according to wholesale data released by the Vietnam Automotive Manufacturers Association (VAMA).
The data excluded a growing number of non member brands, however.
According to VAMA, the domestic vehicle market has now been in decline for more than a year following an initial rebound from the covid lockdowns. Economic growth in the country continued to accelerate in the third quarter of 2023, to 5.3% year on year from 4% in the second quarter, driven by strong service sector activity helped by a rebound in international tourism.
Stimulus measures have so far failed to reignite the market. The ministry of finance cut vehicle registration tax by 50% at the beginning of July until the end of the year to help support the market while dealers are also offering deep discounts. Interest rates have also come down since the central bank hiked its benchmark rate last year.
Registration tax on battery electric vehicles (BEVs) has been cut to zero until 2026 while the ministry is considering additional purchase incentives as part of a broader package to attract more BEV investment in the country including reducing import taxes on components and charging equipment.
VAMA’s data showed vehicle sales fell by 27% to 240,027 units in the first 11 months of 2023 from 327,760 a year ago with deliveries of passenger vehicles plunging by 29% to 184,290 units while commercial vehicle sales dropped by 17% to 55,737 units.
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Truong Hai (Thaco) group, local assembler and distributor of Kia, Mazda, Peugeot and BMW-Mini plus commercial vehicles, reported a 30% fall in group sales to 86,482 units year to date (YTD). This included a 38% plunge in Kia sales to 36,035 units, a 7% fall in Mazda sales to 31,296 units; and a 78% plunge in Peugeot sales to 2,485 units; while Thaco truck and bus sales were down 30% to 14,793 units.
Toyota sales fell 41% to 48,364 vehicles YTD with the Hilux pickup truck and Hiace light van still largely absent from the market. This benefited Ford which reported a 39% jump in sales to 33,468 units thanks mainly to strong demand for its locally assembled Ranger and Transit light commercial vehicles while Mitsubishi sales fell by 28% to 26,620 units, Honda 19,743 units (-30%) and Suzuki 12,202 units (-16%).
Separate reports suggested Hyundai sold around 62,000 vehicles YTD making it the country’s leading vehicle brand in that period ahead of Toyota while VinFast sold just 19,500 BEVs worldwide in the first nine months of the year. The company launched the new VF6 subcompact BEV at the end of September.
A number of Chinese brands recently entered Vietnam, also targeting the BEV segment, including BYD, Lynk & Co, SAIC Motor and Great Wall Motor, while Hyundai launched the Ioniq 5 in May and Mercedes-Benz also said it would introduce three new BEV models by the end of the year.