The Battle for the Vietnamese Market: Can Chinese Automakers Find Success with Their Unconventional Strategies?

The Rise of Chinese Auto Brands in Vietnam: Strategies and Challenges

The automotive industry in Vietnam is witnessing a wave of Chinese brands, bringing a range of new and unfamiliar brands and products to the market. Some of these brands are making their mark in neighboring countries, while others are still relatively unknown to Vietnamese consumers.

A common challenge faced by most Chinese automotive brands in Vietnam is the need to overcome various hurdles to gain a foothold in the market. In response, these brands are employing unique strategies to attract local customers.

## Test Drive for 30 Days

BYD, which entered the Vietnamese market in July 2024 with a range of electric vehicles, including the BYD Dolphin, BYD Atto 3, and BYD Seal, has nearly doubled its product portfolio in less than a year. The addition of the BYD Sealion 6, their first hybrid model, is particularly noteworthy.

However, BYD has not yet replicated the rapid success it has achieved in other Southeast Asian markets. Brand value, consumer bias, and charging infrastructure challenges are some factors hindering BYD’s path to becoming the top electric vehicle brand in Vietnam.

To address this, BYD has introduced an unprecedented program, offering Vietnamese customers a 30-day free trial of their vehicles. According to sales consultants, BYD will randomly select 30 customers each month from a registered list to participate in this program, providing them with a free 30-day trial of the BYD Dolphin, BYD Atto 3 Dynamic, BYD Atto 3 Premium, BYD Seal Advanced, or BYD Seal Performance.

Should customers decide to purchase a vehicle after the trial period, BYD offers additional incentives, including a 5-10% discount on the listed price, free access to the BYD app, or complimentary accessories, depending on the vehicle type and condition.

BYD offers a unique 30-day free trial program for Vietnamese customers.

## Extended Warranty Periods

In Vietnam, the standard warranty period for automobiles, including the engine, ranges from 3 to 5 years or 100,000 to 150,000 kilometers, depending on which comes first. Some brands, like Toyota, offer a 3-year or 100,000-kilometer warranty, while Hyundai provides a 5-year or 100,000-kilometer warranty for domestically assembled vehicles. Kia and Mazda offer a similar warranty of 5 years or 150,000 kilometers.

MG stands out with its 5-year warranty with no kilometer limit for their passenger cars, while VinFast, a Vietnamese electric vehicle manufacturer, offers an impressive 7 to 10-year or 160,000 to 200,000-kilometer warranty, whichever comes first, for their entire range of vehicles.

Omoda and Jaecoo, two new brands from the Chery group, have also made a strong impression with their extended warranty policies. They offer a one-million-kilometer travel warranty or a 7-year warranty for the vehicle and a 10-year warranty for the engine, whichever comes first. This demonstrates their confidence in the quality of their products as they aim to win over Vietnamese customers.

## Strategies and Challenges for Chinese Auto Brands in Vietnam

The unique strategies mentioned above are just a few examples of how Chinese automotive brands are trying to establish themselves in the Vietnamese market. Some brands are even planning to build local factories, while most are focusing on expanding their dealer and service center networks as a sign of their long-term commitment.

However, the Vietnamese market presents a unique set of challenges for Chinese brands, especially when compared to other Southeast Asian countries like Thailand, Indonesia, or Cambodia. Overcoming consumer bias and past perceptions of Chinese automotive quality and commitment will be crucial for their success.

For electric vehicles, in particular, the lack of charging infrastructure remains a persistent issue. Chinese automotive brands must invest in building public charging stations to support their vehicles and ensure customer convenience.

Additionally, Chinese brands face competition from established brands that have already built a strong presence in Vietnam over the years. The rise of VinFast in the electric vehicle segment further intensifies the challenge for Chinese brands entering the market for the first time.

To attract attention and build trust, Chinese automotive brands are employing unique strategies and offering highly competitive products, such as the Geely Coolray and MG G50, which are among the most affordable in their respective segments.

While Chinese automobiles are receiving a more favorable response in Vietnam due to various factors, their long-term success and ability to compete on equal footing with established brands remain to be seen. A more pessimistic outlook considers the possibility of an early exit by some Chinese brands, similar to GAC Aion, or unclear commitments by others, which could impact the overall perception of Chinese automotive brands in Vietnam.

The financial burden left on Vietnamese partners and customers in the event of an early exit is a concern that needs to be addressed through long-term investment and commitment by Chinese automotive giants.

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