New vehicle sales in Vietnam fell 26% to 23,458 in October 2023 from 31,623 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 data, the market has now been in decline for a full year following an initial rebound from the Covid lockdowns with consumers and business impacted by last year’s sharp interest rate hikes which the central bank largely reversed earlier this year.
Economic growth continued to accelerate in the third quarter, to 5.3% year on year from 4% in the second quarter, driven by strong service sector activity and helped by a rebound in international tourism.
The finance ministry halved vehicle registration tax at the beginning of July until the end of the year to help support domestic vehicle manufacturers which are also offering discounts to stimulate sales. The registration tax on battery electric vehicles (BEVs) has been cut to zero until 2026 while additional purchase incentives are being considered by the ministry as part of a broader package to attract more BEV production in the country, including reducing import taxes on components and charging equipment.
VAMA data showed vehicle sales fell 28% to 213,588 units in the first 10 months of 2023 from 296,574 in the same period of last year, with deliveries of passenger vehicles plunging 31% to 162,723 units while commercial vehicle sales dropped 17% to 50,865 units.
The data did not include sales of key brands such as Mercedes-Benz, Hyundai, Tesla, domestic startup VinFast and a growing number of Chinese brands that have entered the market in the last year.
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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 32% plunge in group sales to 76,934 units year to date (YTD). This included a 39% drop in Kia sales to 31,897 units; an 8% fall in Mazda sales to 27,791 units; and a 78% plunge in Peugeot sales to 2,077 units; while Thaco truck and bus sales were down by 30% at 13,587 units.
Toyota sales fell 42% to 42,531 vehicles YTD with the Hilux pickup truck and Hiace light van still largely absent from the market. This has benefited Ford which reported an 71% jump in sales to 29,546 units thanks mainly to strong demand for its locally made Ranger and Transit light commercial vehicles while Mitsubishi sales fell by 28% to 24,103 units; Honda 17,218 units (-36%); and Suzuki 11,528 units (-14%).
Separate reports suggested Hyundai sold 40,778 vehicles in the first nine months of 2023, making it the country’s leading vehicle brand in that period just ahead of Toyota, while VinFast sold just 19,500 BEVs globally in the first nine months. The company launched the new VF6 sub-compact BEV model at the end of September.
A number of Chinese brands recently entered Vietnam, targeting also the BEV segment, including BYD, Lynk & Co, SAIC Motor and Great Wall Motor, while Hyundai launched the Ioniq 5 in May and Mercedes-Benz said it would introduce three BEV models by the end of the year.