New vehicle sales in Vietnam declined by almost 12% to 20,562 units in June 2021 from 23,324 units a year earlier, according to wholesale data released by the Vietnam Automotive Manufacturers Association (VAMA).

Last month’s decline reflected the country’s worst outbreak of coronavirus infections since the start of the pandemic with the government imposing strict movement control orders in key parts of the country to help slow the spread of the virus.

The south of the country, including Ho Chi Minh city, is the worst affected area.

The country’s GDP was estimated to have rebounded by 6.6% in the second quarter, from close to zero growth a year earlier, in the initial stages of the pandemic after growing by 4.7% year-on-year in the first quarter of 2021.

Economic growth this year was driven by strong manufacturing output, fuelled by buoyant domestic demand and exports, while foreign direct investment (FDI) weakened in the second quarter.

Vehicle sales in the first six months of the year were 32% higher at 135,606 units from 102,720 units a year earlier, with passenger vehicle sales rising by over 33% to 99,410 units while commercial vehicle sales were up by close to 29% at 36,196 units.

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Truong Hai (Thaco) group, the local assembler and distributor of brands including Kia, Mazda, Peugeot, BMW-Mini, and also a significant player in the commercial vehicle segment, reported a 51% surge in group sales to 51,685 units in the six-month period.

This included a 95% jump in Kia sales to 21,556 units, a 26% rise in Mazda sales to 13,297 units and a 13% increase in Thaco truck sales to 12,340 units.

Toyota sales rose by 16% to 29,239 units year-to-date; while Mitsubishi Motors’ sales jumped by 45% to 14,915 units; Honda 11,684 units (-3%); Ford 11,428 units (+36%); and Suzuki 6,773 (+52%).

The VAMA data did not include sales by domestic start-up Vinfast, which delivered 24,112 vehicles in Vietnam in 2020. The company has not yet released its June data, but sales in the first five months of 2021 amounted to 12,421 units.

The company, which is preparing to launch its first electric vehicle (EV), has called on the Vietnamese government to introduce sales incentives to help lift domestic demand for zero-emission vehicles.