The Evolution of Vietnam’s Automotive Industry: A Pause Amidst the Buzz of Registration Fee Reduction

Mitsubishi Xpander remains the top-selling car in Vietnam for November. Photo by Vinh Phuc.

According to the latest report from the Vietnam Automobile Manufacturers’ Association (VAMA), Vietnam’s automobile market consumed a total of 24,350 vehicles of all types in the first month of the second quarter, an 11% decrease compared to March but a 9% increase year-on-year.

The sales of domestically assembled cars reached 11,983 units in April, equivalent to a 17% decrease compared to the previous month. Meanwhile, the sales of imported cars also decreased by 3% compared to March, reaching 12,367 units.

Toyota returns to the top

Mitsubishi Xpander topped the sales chart once again, solidifying its position as one of the most popular car models in the Vietnamese market at the moment. With 1,263 units sold in April, the Xpander narrowly surpassed the Ford Ranger (1,262 units) to become the best-selling car in the first month of the second quarter.

After a relatively challenging start to the year, Toyota cars have made a remarkable comeback, with three models in the top 10 best-selling cars in the entire market.

The Toyota Vios took third place with 923 units sold, while the Toyota Yaris Cross also made it to the top 5 with 882 units sold in April. The most impressive performance came from the Toyota Innova Cross, which saw a nearly 3.5-fold increase in sales in April, reaching 802 units, including 141 hybrid models.

The Hyundai Accent and Mitsubishi Xforce continued their strong performance in the top 10 best-selling cars for the month, with sales of 848 units and 806 units, respectively. The Mazda CX-5 and Ford Everest also maintained their positions in the top-selling list, with sales of 800 units and 766 units, respectively.

Meanwhile, the Honda CR-V made a surprising return to the top-selling group, with sales of 626 units, outperforming fellow Honda models such as the Honda City (405 units), Honda BR-V, and Honda HR-V, which sold 321 units and 248 units, respectively.

The position of hybrid vehicles in the market

The Honda CR-V’s sales performance in April was significantly boosted by the e:HEV RS model, with 534 units sold. In contrast, only 92 units of other CR-V models were delivered to customers during the same period.

In fact, the Honda CR-V e:HEV RS model alone outsold all other Honda car models in April, surpassing the Honda City’s sales of 405 units.

The e:HEV RS model accounts for a significant proportion of Honda CR-V sales in April. Photo by Phuong Lam.

The Suzuki Ertiga Hybrid was the second best-selling hybrid model in the market, with 203 units sold in April. Toyota also sold 141 units of the Innova Cross Hybrid, 41 units of the Yaris Cross Hybrid, 23 units of the Camry Hybrid, and a few units of the hybrid versions of the Corolla Cross and Corolla Altis.

For the Kia Sorento, the hybrid version accounted for more than 16% of its total sales in April, with 14 units sold.

Overall, hybrid vehicles have yet to achieve a significant market share in Vietnam. However, with the increasing focus on hybrid engines by car manufacturers, it is expected that sales of hybrid vehicles will continue to grow in the future.

Waiting for a boost

Despite the 11% sales decline in April, the Vietnamese automobile market is expected to regain its momentum in the remaining months of 2024.

There is a high possibility that the government will implement a preferential policy for registration fees for domestically assembled cars from mid-year. This move is expected to stimulate demand, boost sales for car manufacturers, and bring the Vietnamese automobile market back to a stable growth trajectory.

The news of potential registration fee reductions for domestically assembled cars has already had a positive impact on the domestic automobile supply chain. According to the General Statistics Office, an estimated 25,700 cars were produced by domestic assembly lines in April, an increase of about 4.8% compared to the previous month. This stable supply can lay the foundation for further sales growth in the Vietnamese automobile market.

Domestic car supply increases slightly ahead of the expected reduction in registration fees for domestically assembled cars. Photo by Viet Linh.

Additionally, the introduction of updated models, new market entrants, and the arrival of new car brands are expected to contribute to the recovery of the Vietnamese automobile market in the second half of the year.

In June, BYD, the world’s largest new energy vehicle manufacturer in 2023, will officially enter the Vietnamese market. Although BYD will focus on electric vehicles, their presence is expected to create competition in the market, especially if their pricing strategy matches that of gasoline-powered vehicles in the same or similar segments.

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