The Race to the Top: Anticipating a Record-Breaking Finish for Vietnam’s Automotive Industry

After three months of implementing preferential registration fees for domestically assembled cars, the Vietnamese car market has witnessed a remarkable surge in sales.

This growth momentum, coupled with the trend of buying cars for the Lunar New Year holiday, is expected to help the Vietnamese car market successfully “reach its target” in 2024.

Two Months of Acceleration

The Vietnamese car market experienced a slowdown in the early months of the year, with car sales hitting a low of 11,633 units in February, according to Tri Thức – Znews.

Although sales quickly rebounded in March, the number of cars purchased by Vietnamese people before September never exceeded the 30,000 units/month mark.

One of the reasons for the lack of breakthrough in car sales in Vietnam during this period is believed to be related to customer psychology. Through exchanges with Tri Thức – Znews, car dealership consultants revealed that Vietnamese customers were waiting for another round of registration fee reductions to be implemented in 2024.

Currently, the price range of 700 million VND is quite common in the Vietnamese car market, and with a 50% discount on registration fees, customers can save around 35-42 million VND in ownership costs. While the price reduction is not significant, this policy is always expected to be an effective “medicine” to stimulate demand and increase sales.

After several delays, the fourth round of registration fee incentives took effect in September and lasted for three months, instead of six months as in previous years. Although not too long, this incentive has helped the Vietnamese car market accelerate sales quite significantly.

The total car sales in the Vietnamese market in September reached 36,585 units, according to a report by the Vietnam Automobile Manufacturers’ Association (VAMA). Thus, in the first month of implementing the policy of reducing registration fees, the total car sales in Vietnam immediately surpassed the 30,000-unit mark and set a new high for the year.

The momentum continued into October, with a new peak in sales of 38,761 units, up 6% from September and a substantial 53% higher than the same period last year.

Waiting for the “Finish Line”

As of the end of August, the Vietnamese car market’s sales growth was 2% year-on-year. By the time the 10-month sales were summarized, the number of cars purchased by Vietnamese people this year was 12% higher than in the first ten months of 2023.

It is likely that the growth rate of car sales in Vietnam will continue to improve in the last month of the registration fee incentive. December is also a period that typically sees a significant increase in car sales to meet the demand for the Lunar New Year holiday.

Along with the recent positive developments due to the three-month registration fee incentive, the Vietnamese car market in 2024 is expected to successfully “reach its target.”

Currently, the Mitsubishi Xpander (with 15,087 units sold so far this year) still has the opportunity to reclaim the sales performance that made this small MPV the “sales king” in Vietnam last year. The Ford Ranger and Mitsubishi Xforce are also performing well, with sales of 13,647 and 11,444 units, respectively, after ten months.

The electric vehicle manufacturer VinFast is also likely to contribute several models to the list of Vietnam’s top ten best-selling cars. The company’s urban electric models, such as the VF 3 and VF 5, are enjoying strong sales and receiving significant attention from Vietnamese customers.

In general, the preferential registration fee for domestically assembled cars has created a positive impact on car sales in Vietnam. However, it will be challenging for Vietnam to become an attractive new market for car manufacturers if sales depend on the presence of registration fee incentives.

Before the fourth round of registration fee reductions, which took place from September to November, many car brands in Vietnam tried to stimulate demand by reducing prices, offering promotions equivalent to registration fee reductions, or giving cash gifts worth up to hundreds of millions of VND, applicable to both imported and domestically assembled cars.

Although the promotional value was quite attractive, the situation at dealerships indicated that Vietnamese customers still seemed to be “waiting” for the registration fee reduction. This is considered unhealthy for the development of the Vietnamese car market.

In the coming year, the competitiveness of the Vietnamese car market is likely to improve with the entry of new car brands, mainly Chinese car manufacturers.

You may also like

The 7 Most Notable Events in Vietnam’s Automotive Industry in 2024

The automotive industry in Vietnam witnessed a memorable year in 2024, marked by significant events such as the reduction of registration fees for domestically produced and assembled vehicles, the remarkable rise of VinFast, and the influx of Chinese automobiles.

The Worst-Selling Cars in Vietnam: Is the Honda Accord Doomed?

In December 2024, the Honda Accord continued its lackluster performance in the Vietnamese market, selling only 12 units.

The Race to Register: How Dealerships are Speeding Up Car Registrations for their Clients

Our expert sales consultants are offering a fast-track service to help customers finalize their car registration before the discounted tax rate ends in late November.

The Korean and Japanese Car Wars: Has the Tide Turned?

The sales battle between Korean and Japanese cars in Vietnam is witnessing a shift that spells bad news for Korean automakers.

The Ultimate Guide to November 2024 C-SUV Sales: Segment-Wide Growth, with Hyundai Tucson as the Undisputed Star

The Hyundai Tucson experienced an impressive growth spurt in November 2024, solidifying its position as the standout performer in the highly competitive C-SUV segment.