New vehicle sales in Vietnam increased by 2.5% to 22,374 units in May from 21,829 units in the same month of last year, according to member data released by the Vietnam Automotive Manufacturers Association (VAMA). 

The vehicle market overall is beginning to stabilise after the Vietnamese government introduced new minimum standards for emissions, warranties, type approval and aftermarket services at the beginning of the year.

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The government also cut import tariffs to zero on built-up vehicles originating from neighbouring ASEAN countries with cheaper imports eventually expected to lead the market higher once import procedures are improved.

But the Thai government is increasingly concerned that bottlenecks in the import approval process, particularly in local testing procedures, have replaced tariffs as the country's main automotive import barrier.

Thailand's deputy industry minister Somchai Harnhiran complained this week CBU exports from Thailand to Vietnam have fallen by 80% since the beginning of the year. 

Thailand is said to be preparing retaliatory trade measures with Vietnam in case auto trade between the two countries does not improve.

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Total vehicle sales in the first five months of 2018 were down by just 1.2% at 101,489 units from 102,740 units in the same period of last year with passenger vehicle sales rising by over 11% to 67,652 units while sales of trucks and buses fell by 19.5% to 33,837 units.

Truong Hai (Thaco) group, the local assembler and distributor of brands such as Kia, Mazda, Peugeot and Hyundai and a significant player in the commercial vehicle segment, reported a 4.5% rise in group sales to 42,438 units in the first five months of the year. 

Mazda sales alone were up by close to 27% to 13,821 units, while Kia sales rose by more than 13% to 11,427 units.

Toyota remained the leading vehicle brand in the country over the five-month period, albeit with sales falling by 5.9% year-on-year to 21,482 units. 

Honda's sales doubled to 8,919 units while Ford's sales plunged by over 31% to 8,215 units and GM's were down by close to 18% at 3,966 units.