Challenges Await Sedans in the Vietnamese Car Market

Toyota Vios. Photo: Duc Tran.

Sedans used to be one of the largest segments in the hearts of Vietnamese car users. However, in recent years, the market share of low-ground-clearance cars has rapidly declined due to the general situation of the market and fierce competition from SUVs and large-size MPVs. Many theories suggest that sooner or later, the Vietnamese market will be devoid of sedans.

Sedan is no longer leading

According to the latest report in November 2023 by the Vietnam Automobile Manufacturers Association, the sales of “sedan kings” like Toyota Vios and Hyundai Accent have also declined sharply after 11 months of being hit by the gloomy market situation.

After many years of leading the market in terms of sales, Toyota Vios is expected to lose its throne to Mazda CX-5 or Mitsubishi Xpander due to its relatively low purchasing power. Previously, the annual sales of Toyota Vios and Hyundai Accent always exceeded 15,000 units.

However, in many months of 2023, Toyota Vios has always struggled due to uncontrollable decline, only finding improvement in the fourth quarter thanks to discount programs from dealers and manufacturers.

The market share of the “sedan king” is also weakening
Sales figures of Toyota Vios and Hyundai Accent accumulated in 11 months of 2021-2023 (data: VAMA, TC Group)
Brand	11 months/2021	11 months/2022	11 months/2023
Toyota Vios	units	17133	20765	10499
Hyundai Accent		17439	19716	14700

During the 11 months of 2023, Toyota Vios sold only 10,499 units, less than 50% of the sales volume in 2022 (23,529 units). This figure was enough to bring the “sedan B king” into the top 5 best-selling cars in the market in 2023, but it is certainly not enough to regain the throne.

Hyundai Accent, the main competitor of Toyota Vios, also only successfully consumed 14,700 units after 11 months of 2023, equivalent to a decrease of about 34.12% compared to the same period in 2022. With this sales result, Hyundai Accent will also temporarily give the second place to Mazda CX-5 in the total annual sales table.

In the meantime, Mitsubishi Xpander or Mazda CX-5, although still experiencing a slight decrease in sales, have been steadily leading the market. Almost certainly, Mitsubishi Xpander will be the “sales champion” in 2023, both in the economy MPV segment and overall in the Vietnamese automobile market, surpassing the “sedan king” Toyota Vios.

Continuous price reductions to attract customers

Throughout many months of 2023, the Vietnamese car market witnessed unexpectedly deep promotional programs to improve sales. Among them, low-ground-clearance cars also had to offer incentives, but sometimes they did not register positive sales growth as expected.

Honda Vietnam and its dealers have continuously implemented large-scale incentives with a value of over 220 million VND for the Honda Accord sedan in 2023. However, the Honda Accord is still struggling to find a place in the hearts of consumers, as its competitiveness is not equal to that of its competitors due to limited versions and engine options. By the end of November 2023, the sales of this model had not even reached 60 units per year.

Mitsubishi Attrage. Photo: Mitsubishi Vietnam.

In the first half of the third quarter, Toyota Camry was also subject to many dealers’ incentive programs, with discounts of up to tens of millions of VND to stimulate purchase demand. In particular, there was a time when this D-segment sedan was being cleared by some dealers with nearly 100 million VND discount. However, the number of cars sold in the last 3 months of the year did not increase, but continued to decrease.

During the second and third quarters, Hyundai Accent and Toyota Vios were also subjected to continuous discount programs by dealers when it was noticed that the purchasing power did not improve. In addition to a 50% registration fee incentive, customers purchasing Toyota Vios or Hyundai Accent also received additional discounts of tens of millions of VND from the dealers.

However, deep promotions have not really helped the two sedan kings regain their original positions in the face of pressure from large-size SUVs and crossovers.

In 2024, this segment is sure to face even more difficulties as electric cars are rapidly entering the Vietnamese market. Sedans will need more than just promotional programs to regain their market share next year.

Too many strong rivals

In reality, sedans still retain their inherent advantages of stable operation, durability, and are increasingly supplemented with advanced technologies. However, other car groups have effectively overcome their weaknesses and reduced the advantages of sedans.

Mercedes-Benz EQS sedan variant.

Small-sized SUVs and mainstream MPVs are becoming more stylish, more reliable, and competing with B-segment and C-segment sedans. Meanwhile, in the D-segment sedan, the SUV and crossover groups are doing their job very well, especially in terms of driving performance, which is not inferior to sedans.

In the electric car group, sedans also face difficulties when they have to add large-sized batteries, whereas this is not a problem for SUVs. The trend of car purchasing by consumers worldwide is also focusing more on SUVs rather than the once-popular 4-seater cars.

Of course, there are still certain users who love the experience of driving sedans, but in terms of convenience and serving the family, sedans are clearly facing many difficulties in the global market, including Vietnam.