New vehicle sales in Vietnam declined by 3.7% to 21,913 units in June from already weak year-earlier sales of 22,750 units, according to member data released by the Vietnam Automotive Manufacturers Association (VAMA).

Despite strong economic growth in the country, estimated at 7.1% in the first half of 2018, the vehicle market is struggling to recover from last year's decline.

Vehicle importers and distributors are still adjusting to regulatory changes introduced by the Vietnamese government at the beginning of the year, including new minimum standards for emissions, warranties and aftermarket services.

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

Total vehicle sales in the first six months of 2018 were down by 1.9% at 123,060 units from 125,490 units in the same period of last year, driven lower by a more than 20% drop in commercial vehicle sales to 40,470 units from 51,049 units a year earlier.

Sales of pickup trucks, many of which are imported from Thailand, were almost 49% lower at 5,888 units, according to the association, while passenger vehicle sales increased by almost 11% to 82,590 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 5.3% year-on-year rise in group sales to 50,397 units in the first half of 2018.

Mazda sales alone were up by over 27% to 16,502 units, while Kia sales rose by close to 16% to 13,781 units.

Toyota remained the leading vehicle brand in the country over the six-month period, albeit with sales falling by more than 13% to 25,750 units, while Honda's sales more than doubled to 11,181 units. Ford's sales fell by over 33% to 9,579 units and GM's were just over 9% lower at 5,197 units.