Vietnam’s new vehicle market plunged by a further 54% to 12,296 units in September 2021 from 26,849 units a year earlier, according to wholesale data released by the Vietnam Automotive Manufacturers Association (VAMA).

Large parts of Vietnam remained under strict lockdown last month, as the country looked to contain its worst wave of coronavirus infections since the pandemic began early in 2020, which significantly held back business activity and disrupted regional supply chains. The south of the country, including the business capital Ho Chi Minh City, was the worst affected area.

Restrictions were being eased gradually in October, but significant economic damage had already been done with the country’s GDP estimated to have contracted by 6.2% year on year in the third quarter. Economic growth forecasts for 2021 have been revised sharply lower, with the Asia Development Bank now expecting full year GDP growth of 3.8% compared with 5.8% in July.

Vehicle sales in the first nine months of the year were slightly lower at 170,073 units compared with 172,538 units a year earlier, with a sharp third quarter decline wiping out earlier gains. Passenger vehicle sales fell by close 4% to 122,567 units in this period while commercial vehicle sales were up by just under 5% at 47,506 units.

Truong Hai (Thaco) group, the local assembler and distributor of brands such as Kia, Mazda, Peugeot, BMW-Mini and a significant player in the commercial vehicle segment, reported a 10% rise in group sales to 65,764 units in the nine month period. This included a 35% rise in Kia sales to 27,595 units while Mazda sales were down by 16% at 16,420 units and Thaco truck sales were 6% lower at 16,060 units.

Toyota sales fell by 7% to 38,055 units year to date while Mitsubishi Motors sales were down by 1% to 16,978 units, Honda 14,098 units (-15%), Ford 14,876 units (+3%) and Suzuki 8,091 (-7%).

The VAMA data do not include sales by domestic startup Vinfast which delivered 29,480 vehicles in Vietnam in 2020 and 22,000 units in the first eight months of 2021. The company is preparing to launch its first electric vehicle (EV) and has been busy rolling out an EV recharging network across the country.

Vietnam is looking to raise its emission standards to Euro V in January 2022 which is expected to affect imports from neighbouring countries such as Thailand and Indonesia, but could favour VinFast which has been lobbying the government for additional EV sales incentives.