Vietnam’s Passenger Vehicle Market Continues to Grow

18 Jun 2020   |  Vietnam

A recent study of Solidiance said Vietnam’s passenger vehicles market is forecast to continue its upward growth trend, with sales reaching ~225,000 units by 2020. Currently, the market is the fastest in Southeast Asia, but overall numbers still lag neighboring countries.

Vietnam’s passenger vehicle market is in a rapid growth phase and was the fastest growing market in ASEAN between 2012 and 2016, growing at a CAGR of ~38%, said the study that was released in June 2017.

Several key factors have given a significant rise to the surging demand for passenger vehicles, including stable macroeconomic growth, sociocultural trends and an increasingly liberalized trade environment.

However, compared to other neighboring Asian countries such as Indonesia, Thailand, and Malaysia, Vietnam has the lowest passenger vehicle density per 1,000 people. However, in regards to sales growth, Vietnam surpassed its peers with 38% CAGR from 2012-2016.

Most aftermarket activities in Vietnam are focused in Tier 1 cities, such as Ho Chi Minh City and Hanoi. Vietnam’s largest and wealthiest cities – Hanoi and Ho Chi Minh City – account for ~45% of total registered passenger vehicles, concentrating aftermarket opportunities. These two cities are home to ~17% of the country’s population and contribute 35% to the national GDP.

In term of brands, Vietnam’s passenger vehicle market is dominated by Toyota as well as major local players such as Thaco, which currently assembles vehicles for Mazda, Kia, and Peugeot.

European brands such as Fiat, Renault, VW, and Mini Cooper have had more di culty penetrating the Vietnamese auto market than Japanese and Korean models - Toyota, Honda, Kia, Mazda – which are set at more affordable price points, typically ranging from 13,300- 31,000 USD.

The lack of local assembly for these European brands has impacted their price competitiveness, which in turn makes it more expensive to produce than Asian brands.

Toyota is one of Vietnam’s early entrants in the market. Through its extensive OEM workshop networks and strong brand, Toyota has captured the country’s top market position.

In terms of vehicle model, Toyota Vios is the most popular among the domestic market, selling as much as 13,761 units in 2015.

Read Other Insights
Vietnam’s Healthcare Cost Challenge
Vietnam’s Healthcare Cost Challenge: Actions to Take

Vietnam continues to face healthcare expenditure challenge, according to Solidiance’s white paper, “The ~USD 320 billion healthcare challenge in ASEAN.

Vietnam Become Global Agriculture Powerhouse
Vietnam Pursues Plan to Become a Global Agriculture Powerhouse

Vietnam is currently pursuing an ambitious plan to become a global agricultural powerhouse by 2030.

Vietnam’s Passenger Vehicle Market
Vietnam’s Passenger Vehicle Market Continues to Grow

Vietnam’s passenger vehicles market is forecast to continue its upward growth trend, with sales reaching ~225,000 units by 2020.

Fintech in Vietnam Market
Have Fintech Companies Really Disrupted the Vietnamese Market?

New Fintech Report on Vietnamese market provided by Solidiance.