The Future of Affordable Sedans in Vietnam

The B-segment sedan is facing challenges from the very first month of the year. Photo by Minh Quân.

Sales reports show that the Vietnamese automotive market is going through a relatively difficult period. According to the Vietnam Automobile Manufacturers’ Association (VAMA), total vehicle sales in the Vietnamese market reached 30,876 units, a 23% decrease compared to the same period in 2023. Among these, passenger car sales decreased by 26%, reaching 22,844 units in the first two months.

Slow Sales for Economy Sedans

Amid the general difficulties in the market, the economy sedan segment, led by the Toyota Vios, Hyundai Accent, and Honda City, is also struggling to maintain positive sales figures.

In the first two months of the year, the total sales of the seven models in this segment reached 4,128 units, with a mid-quarter sales figure of 1,511 units for the B-segment sedans.

Last year, the Hyundai Accent was a rare bright spot, maintaining sales of over 1,000 units per month for almost the entire first half of 2023. However, Accent’s sales in the first two months of this year also show signs of weakening along with the slow market demand.

B-segment sedans are off to a slow start this year
Sales figures for B-segment sedans in Vietnam for the first two months (Data: VAMA, TC Motor)
Brand	January	February
Honda City	units	482	640
Hyundai Accent		916	365
Mazda2		372	250
Toyota Vios		653	170
Mitsubishi Attrage		150	67
Kia Soluto		41	19
Suzuki Ciaz		3	0

The Toyota Vios is also off to a slow start, with temporary sales of 822 units in the first two months. On the other hand, the Honda City continues to have a relatively positive start to the year, becoming the best-selling B-segment sedan in Vietnam in February. However, the sales figure of 1,122 units since the beginning of the year is not enough for the Honda City to surpass the Hyundai Accent in cumulative sales.

Considering the entire B-segment sedan market, only the Honda City recorded sales growth in February. The Suzuki Ciaz had its first month of zero sales this year, while the Hyundai Accent and Toyota Vios also saw sales declines of 60.2% and 74%, respectively, in the mid-quarter report.

Taking advantage of the decline in Toyota Vios sales, the Mazda2 moved up to third place in the list of best-selling B-segment sedans in February in Vietnam. Sales of the Thai-imported model reached 250 units, higher than the Toyota Vios (170 units), Mitsubishi Attrage (67 units), and Kia Soluto (19 units).

The slow sales resulted in a 42.3% decline in total sales for the economy sedan segment compared to the beginning of the year. From a consumption volume of 2,617 units in January, the B-segment sedan market in Vietnam decreased to 1,511 units in the mid-quarter month.

Challenges Ahead

The top three best-selling B-segment sedans last year were the Hyundai Accent, Toyota Vios, and Honda City, all of which are domestically assembled, along with the Kia Soluto from the Korean brand.

This domestic factor may have contributed to the sales growth of the Accent, Vios, and City in the second half of last year when preferential policies for registration fees were applied to domestically assembled vehicles.

The 2023 Honda City leads the segment in February. Photo by Bối Hạ.

Therefore, when the aforementioned preferential policies ended at the beginning of 2024, the sales of the top three models could not be maintained at a high level, despite the efforts of car manufacturers and dealers to launch promotional programs with equivalent value.

Among these, the Hyundai Accent received a discount of 23-36 million VND depending on the version, the Honda City had a maximum discount equivalent to 100% of the registration fee, and the Toyota Vios had its list price reduced to 458-545 million VND.

The general market difficulties have also caused a slowdown in car sales in Vietnam. As mentioned, the sales decline is not limited to the B-segment sedan market but is also evident in the overall market, including neighboring segments such as affordable MPVs and urban SUVs.

In addition to facing sluggish sales within their segment, the group of B-segment sedans is also under pressure from models in the urban SUV segment.

Since the beginning of the year, a series of models in the B-segment SUV market in Vietnam have had their prices adjusted or promotional discounts of up to hundreds of millions of VND, bringing the starting price of many models below 600 million VND.

The Hyundai Creta, the new Mitsubishi Xforce, and the 2024 Kia Seltos are examples of this trend, as the standard versions of these urban SUVs now have a new price of 599 million VND in the Vietnamese market.

The 2024 Kia Seltos, newly launched in the Vietnamese market, also has a starting price of 599 million VND. Photo by Thaco

The price range below 600 million VND is typically seen as a competitive segment for affordable MPVs, B-segment sedans, and A-segment SUVs. Now, it also includes the Hyundai Creta, Kia Seltos, Mitsubishi Xforce, and Mazda CX-3. Even though they are in the same price range, the urban SUVs are considered to have an advantage over the economy sedans due to their higher ground clearance and sporty design.

The Toyota Yaris Cross, despite having a higher price range after adjustment (650-765 million VND), is still a worthy consideration, as the price difference with the B-segment sedans is only about 100 million VND.

Overall, the B-segment sedan market may face further challenges in the remainder of 2024. Although car manufacturers have made efforts to refresh their offerings with upgrades for the Honda City and Toyota Vios, the sales of small sedans seem to be somewhat affected by the SUV trend.

With the current sales situation, it is challenging for the Toyota Vios, Hyundai Accent, and Honda City to become strong competitors to the Mitsubishi Xpander, Mazda CX-5, or Ford Ranger in the sales race. However, surprises and unpredictability are what make the market attractive.

Let’s wait and see if the B-segment sedan market can revive its sales or, at least, produce a model that can compete for the top sales spot in the Vietnamese automotive market in 2024.