Is the Imported Car Overwhelming the Domestic Assembly?

According to a report by the Vietnam Automobile Manufacturers’ Association (VAMA), the total automobile sales in Vietnam for the first six months of the year reached 134,884 units, a decrease of approximately 2% compared to the same period last year.

Of this total, assembled car sales reached 67,849 units, while the imported car group delivered 67,035 units to domestic customers.

The balance is shifting

In the period 2021-2023, the Vietnamese automobile market only recorded three instances where imported car sales were higher than assembled cars in a reporting period. June and July of 2022 were also rare occasions that witnessed slightly higher consumption of imported cars compared to assembled cars in two consecutive reporting periods.

However, in just the first six months of 2024, there were three consecutive months in the second quarter where assembled car sales were outperformed by imported car sales.

As a result, after the second quarter, assembled car sales reached 67,849 units, a 15% decrease compared to the same period last year, while imported car sales grew by 16%, reaching a total of 67,035 units.

Imported cars competing with assembled cars in the Vietnamese market
Sales of imported and assembled cars in Vietnam in the first six months (Data: VAMA)
Label	January	February	March	April	May	June
Assembled cars	units	9783	6662	14474	11983	11985	12962
Imported cars		9460	4971	12815	12367	13809	13613

The sales balance between the two groups of cars moving towards equilibrium is believed to be significantly influenced by the strong sales performance of imported car models in the Vietnamese market. Currently, the Mitsubishi Xpander is the best-selling model in the market, with sales of 7,773 units, of which imported versions account for 7,000 units, equivalent to a proportion of more than 90%.

The list of the top 10 best-selling models in the Vietnamese market in the first half of 2024 also includes some fully imported car models, such as the Ford Everest (4,442 units), Mitsubishi Xforce (3,890 units), and Toyota Yaris Cross with 3,750 units in the first six months.

Meanwhile, prominent assembled car models such as the Mazda CX-5 (5,270 units), Hyundai Accent (4,988 units), Toyota Vios (4,215 units), Kia Sonet (3,419 units), and Honda City (3,316 units) are relatively less competitive in terms of sales performance.

These models are also considered to be out of the running for the top-selling position in the overall market, as the gap in sales with the leading group has reached nearly 2,500 units.

Assembled car models like the Hyundai Accent are no longer in the top-selling group. Photo: TC Motor.

The unsuccessful proposals to reduce the registration fee in the first half of 2024 are also considered a factor that has impacted the psychology of Vietnamese customers who intend to purchase domestically assembled car models.

Previously, in an interview with Tri Thức – Znews, a sales consultant at a Toyota dealership in Ho Chi Minh City admitted that many customers were waiting for the announcement of the policy to reduce the registration fee for domestically assembled cars before making a deposit and purchasing a vehicle.

Imported cars or assembled cars: Who will win this year?

Despite the current sales gap between assembled and imported cars being only 814 units, it is challenging to assert that the Vietnamese automobile market in 2024 will conclude with a dominance of completely built-up (CBU) imported cars.

The business results for the first six months show that Toyota is the leading brand in the passenger car market, with sales of 22,338 units. Hyundai ranks second with a total of 19,293 passenger cars delivered to customers. Ford’s sales reached 17,651 units, while Mitsubishi reported sales of 14,622 units in the first half of 2024.

Toyota is the leading brand in passenger car sales in Vietnam, excluding VinFast as the company does not disclose sales figures for each market. Photo: Minh Quân.

Among these brands, Toyota has several prominent assembled car models such as the Toyota Vios and Toyota Veloz Cross. Hyundai has a majority of domestically assembled cars, except for the Hyundai Stargazer, which is still imported from Indonesia.

Ford’s sales are mostly contributed by the Ford Territory, Ford Transit, and assembled versions of the Ford Ranger, while Mitsubishi is a brand that mainly distributes imported car models.

In addition, VinFast is also one of the automakers that assemble cars in its factory in Vietnam. This electric car brand announced global sales of 21,747 units in the first six months, mostly from the Vietnamese market.

The VF 5 Plus is considered VinFast’s “ace” in the first six months, and it promises to continue to maintain strong sales in the latter part of 2024. The VF 3, which will be delivered to customers in August, is also expected to contribute significantly to the brand’s sales performance.

The VinFast VF 5 Plus is considered the brand’s “ace” in Vietnam. Photo: VinFast.

Moreover, the sales performance of familiar models in the market, such as the Mazda CX-5, Hyundai Accent, and Toyota Vios, cannot be overlooked. Although they have almost no chance of competing for the top position with the Mitsubishi Xpander or Ford Ranger, the aforementioned models could tip the sales balance in favor of assembled cars.

Additionally, while the preferential policy for registration fees for domestically assembled cars is unlikely to be implemented in the second half of this year, dealerships and automakers may continue to offer promotions in a similar form, expecting to boost sales.

In reality, a number of car models in the Vietnamese market, both imported and assembled, are currently offered with incentives equivalent to a maximum of 100% of the registration fee. Notable models in this group include the Honda City, Honda CR-V, Mitsubishi Xforce, Mitsubishi Xpander, Toyota Vios, Toyota Veloz Cross, Toyota Avanza Premio, and Subaru Forester.

These promotional programs could be a factor in quickly shifting the sales balance. Therefore, whether assembled cars or imported cars will “win” in the Vietnamese market this year will only be determined when 2024 comes to an end.