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The A-segment cars were once one of the most popular choices for automobiles in Vietnam. The trendsetter for the preference for A-segment cars among Vietnamese consumers was the Daewoo Matiz, which was first introduced in 1998.
A Substitute for Expensive Scooters
Around 1998, the price of scooters such as the Honda Spacy and Honda Dylan was around 130 million VND. This price range was not easily accessible for those looking to purchase a scooter, but it was still not enough for Vietnamese consumers to afford an imported car from Japan, the US, or South Korea.
In 1996, the Daewoo Vietnam factory officially commenced operations, and two years later, the Dawoo Matiz was born. Thanks to local assembly, the Matiz had a selling price of approximately 130 million VND in 1998 and quickly became the most popular family car.
With a price comparable to scooters but offering the advantage of protection from the elements, the Daewoo Matiz was considered a game-changer in the transportation choices of the Vietnamese people.
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In 2002, the Daewoo Matiz was renamed the New Matiz, and in 2005, the third version was launched as the Color Matiz. This was also the time when the model that laid the foundation for the A-segment car segment recorded its peak sales in Vietnam, with more than 2,000 units sold.
At this point, the annual automobile consumption of the entire Vietnamese market had not yet reached 50,000 units, meaning that the Matiz alone contributed close to 4% of the total automobile sales.
Paving the Way for A-segment Cars
Not only did the Daewoo Matiz change the way Vietnamese people perceived automobiles, but it also marked the beginning of the popularity of A-segment cars in Vietnam.
Since the launch of the Daewoo Matiz, the range of A-segment car products in Vietnam has expanded year after year.
In 2004, the Kia Morning was introduced to Vietnamese consumers, and two years later, its compatriot, the Hyundai Getz, also entered the market. The Hyundai i10 was launched in Vietnam in 2010 and remains one of the most popular small car choices among Vietnamese buyers to this day.
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As for the Daewoo Matiz, the presence of this pioneer came to an end in 2008 when Chevrolet took over Daewoo in South Korea. From this point on, the family car of many Vietnamese people in the early 2000s was replaced by the Chevrolet Spark.
After the introduction of the Kia Morning and Hyundai i10, and the replacement of the Daewoo Matiz with the Chevrolet Spark in Vietnam, the A-segment car segment welcomed additional models, including the Mitsubishi Mirage, Suzuki Celerio, Toyota Wigo, Honda Brio, and VinFast Fadil.
Boom and Bust
The Kia Morning was the best-selling model in the A-segment car category in Vietnam until 2014, after which Hyundai i10 and Kia Morning took turns leading the market share for small cars.
At this time, the market still had Japanese representatives, but Hyundai i10 and Kia Morning almost turned the A-segment car category into a playground for Korean cars.
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The VinFast Fadil, launched in 2019, immediately changed the game. In addition to its 1.4L engine, which outperformed all its competitors in the same segment, the VinFast Fadil also boasted equipment that was considered on par with, if not superior to, some B-segment cars.
In 2021, the VinFast Fadil surpassed many Korean, Japanese, and American models on the market to become the best-selling car in Vietnam. This was also the first time an A-segment car topped the overall sales charts, marking the most prosperous period for small cars.
The landscape of the A-segment car market changed rapidly in 2022, with the departure of the Toyota Wigo, Honda Brio, and VinFast Fadil for various reasons. Before that, the Suzuki Celerio had also withdrawn from the market, and the Mitsubishi Mirage had been discontinued since 2020.
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There were periods when the Vietnamese market only had the Hyundai Grand i10 and Kia Morning in the small car segment, before the Toyota Wigo returned in 2023.
However, the appeal of this segment is no longer what it used to be. The Hyundai Grand i10 sold 7,944 units in 2023, falling outside the top 10 best-selling cars. The Toyota Wigo, which returned in May 2023, accumulated sales of 1,748 units last year, outperforming the Kia Morning, which sold 1,467 units.
The decline of the A-segment car category has opened up opportunities for various other segments, including A-SUV and small electric vehicles.
From Daewoo Matiz to Electric Cars
Over 25 years of presence in Vietnam, the A-segment car category has evolved from the Daewoo Matiz to the dominance of Korean cars, the explosive success of the VinFast Fadil, and now, a gradual decline.
As the sales of cars like the Hyundai Grand i10, Toyota Wigo, and Kia Morning weaken, neighboring segments such as A-SUV, B-sedan, and affordable MPV have the opportunity to rise due to their accessible prices, larger space, and abundant features.
However, small electric vehicles are the group that has witnessed the most robust growth in Vietnam. In October, VinFast reported selling nearly 5,000 VF 3 cars in Vietnam, while the VF 5 also achieved sales of over 2,600 units.
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The sales of these two VinFast urban electric vehicles in October outperformed all representatives in the A-segment car category, including the Hyundai Grand i10 (753 units), Toyota Wigo (200 units), Kia Morning (86 units), as well as A-SUV models such as the Kia Sonet (718 units), Toyota Raize (698 units), and Hyundai Venue (625 units).
Although not entirely clear, the purchasing trend of Vietnamese consumers in the small car segment seems to be gradually shifting towards electric vehicles. In addition to VinFast’s VF 3 and VF 5, Vietnamese buyers now have a few choices in urban electric vehicles, such as the Wuling Mini EV, Wuling Bingo, or the upcoming Dongfeng Box.
The advantage of this group of vehicles is their compact size, relatively affordable running costs, and prices that are mostly also within a comfortable range compared to pure gasoline-powered cars.
The small A-segment car category in Vietnam started with the Daewoo Matiz, continued with the popularity of Korean cars, peaked with the VinFast Fadil, and is now striving to regain its glory through urban electric vehicles.
Despite being somewhat affected by the preference for SUVs, the small A-segment car category is likely to retain its place in Vietnam, partly due to the emergence of electric vehicles in this segment.
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