New vehicle sales in Vietnam plunged 51% to 10,017 units in February 2024 from 20,536 a year earlier, according to wholesale data from the Vietnam Automotive Manufacturers Association (VAMA).

The data as usual excluded a growing number of non member brands.

The sharp decline was, in part, attributed to the Lunar New Year holidays which resulted in far fewer working days last month compared with a year earlier. The market enjoyed a strong rebound in the previous two months as buyers rushed to showrooms ahead of the expiry of the government’s 50% vehicle registration tax discount at the end of last year. Dealers were since offering substantial discounts and promotions to help offset the expiry of the tax discount amid rising stock levels at most brands.

The registration tax will remain at zero until 2026 for battery electrics while the special consumption tax was reduced to 1% to 3% as part of a broader package of government incentives to attract more BEV investment into the country including import duty cuts for components and charging equipment.

Overall vehicle demand remained weak although the association data did not include sales by Mercedes-Benz, Hyundai, Tesla, Nissan and recently arrived Chinese brands, as well as domestic automaker VinFast.

VAMA data showed vehicle sales fell 23% to 26,714 units in the first two months of the year from 34,534 a year earlier with a 28% decline in passenger vehicle sales to 19,407 units and a 5% drop in commercial vehicle volume to 7,307 units.

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Separate government data showed 51,000 domestically produced and imported vehicles were sold year to date (YTD) while local vehicle production and assembly fell 10% to 37,500 units.

Truong Hai (Thaco), seller of Kia, Mazda, Peugeot BMW Mini and commercial vehicles, reported a 22% drop in group sales to 9,253 units YTD. This ensompassed a 22% fall in Kia sales to 3,755 units, a 20% drop in Mazda sales to 3,327 units but a 27% increase in Thaco commercial vehicle sales to 1,567 units.

Toyota sales plunged 56% to 3,456 units YTD in the absence of key models such as Hiace and Hilux LCVs.

Ford benefited from this with sales falling by just 13% to 4,335 units thanks to the popular Ranger, Transit and Everest.

Honda sales rose 14% to 3,287 units, Mitsubishi 2,611 (-24%) and Suzuki 2,261 (+16%).

Separate reports showed Hyundai sold 5,602 vehicles YTD after shifting 67,450 in full year 2023, making it the country’s best selling brand.