The Vietnamese Auto Market Heats Up in the Last Month of Reduced Registration Fees

The fourth installment of the fee waiver for domestically assembled cars ended in November after a three-month period. Despite its short duration, this year’s fee reduction has significantly boosted Vietnam’s automotive market, with consistent sales growth throughout its implementation.

According to a report by the Vietnam Automobile Manufacturers’ Association (VAMA), Vietnamese consumers purchased a total of 44,200 automobiles in November, marking a 14% increase from the previous month and a remarkable 58% surge compared to the same period last year.

This number comprises 25,114 domestically assembled vehicles, reflecting a 19% growth, along with 19,086 imported cars, representing an 8% increase.

The “Sales King” Races Towards the Finish Line

While the Mitsubishi Xpander experienced a slowdown in sales during October, it quickly regained momentum in the latest reporting period.

In November, Vietnamese consumers purchased 2,422 Mitsubishi Xpanders, allowing last year’s “sales king” in the Vietnamese market to maintain its high position among the best-selling models.

The Mazda CX-5 is also consistently performing well, similar to last year’s year-end sales. This Japanese brand SUV sold 2,408 units, becoming the second best-selling automobile in November.

Surprisingly, the Honda City made it to the top three best-selling cars for the month, with 2,327 units sold, outperforming the Ford Ranger (2,257 units) and its two segment rivals, the Toyota Vios (2,137 units) and Hyundai Accent (2,052 units).

The Mitsubishi Xforce continues to lead the B-segment SUV category, although its November sales stood at 1,823 units. The Hyundai Tucson and Hyundai Creta also made it to the top 10, with sales of 1,584 units and 1,330 units, respectively.

Ford Everest maintains its position in the D-segment SUV category, selling 1,458 units to Vietnamese customers.

As for VinFast, the company reported that it delivered a total of 16,000 electric vehicles to customers in November, averaging 530 electric vehicles sold per day. Cumulatively, VinFast has sold over 67,000 vehicles so far this year, positioning the company to potentially become the largest market share holder in Vietnam for 2024.

Many Models Benefited from New Launches

Apart from the positive impact of the fee reduction program, several models witnessed a boost in sales thanks to the introduction of upgraded or new generations in Vietnam.

A prime example is the Hyundai Tucson. With 1,584 units sold in November, the C-segment SUV’s sales nearly tripled compared to the previous reporting period. The Hyundai Tucson unveiled its upgraded version in mid-October, retaining the four existing variants while significantly reducing the price compared to its predecessor.

Its older sibling, the Hyundai Santa Fe, has also been on a sales growth trajectory for the third consecutive period. The D-segment SUV introduced its new generation in mid-September, offering a total of five versions with prices ranging from VND 1,069 billion to VND 1,365 billion, but without the hybrid option.

Similarly, the Suzuki XL7 Hybrid, the only hybrid option in the small MPV segment in Vietnam, has been on a sales growth trajectory for the third consecutive period.

Although it hasn’t quite matched the sales figures of its pure gasoline predecessor, the XL7 Hybrid’s November sales of 418 units brought its three-month cumulative sales to 982 units.

Isuzu D-Max experienced a slight increase in sales to 87 units after launching its upgraded version at the VMS 2024 exhibition. However, this mid-size pickup truck from the Japanese brand still struggles to compete within its segment.

The Toyota Land Cruiser Prado made a spectacular comeback, selling 72 units in November. The off-road SUV was introduced in its new generation in mid-November and immediately created a buzz in the market.

Despite its high price of VND 3.48 billion and the “bia kèm lạc” phenomenon, where additional fees and charges are added to the listed price, the Land Cruiser Prado still managed to achieve sales after ten consecutive months of zero sales.

An Effective Remedy

It is safe to say that the policy of reducing the registration fee has always been an effective remedy for the Vietnamese automotive market.

During the three-month period of the 50% registration fee reduction for domestically assembled cars, automobile consumption in Vietnam consistently reached record highs, breaking and setting new peaks since the beginning of the year.

After eleven months, the sales of new automobiles in Vietnam reached 308,544 units, a 17% increase compared to the same period last year. This includes 159,868 domestically assembled vehicles, reflecting a 1.6% growth, while imported car sales surged by 40% compared to the first eleven months of 2023, reaching 148,676 units.

Specifically, during the three months of the fee waiver program, automobile sales in Vietnam were 36,585 units, 38,761 units, and 44,200 units, respectively. The total sales during this period amounted to nearly 120,000 units, equivalent to nearly 39% of the cars purchased by Vietnamese consumers in the first eleven months.

This growth trend is likely to continue, as December usually marks a peak in car purchases for the Lunar New Year holiday. While it may be challenging to set a new sales record, the buying momentum in December is not expected to decline significantly.

Although the fee waiver policy has proven to be an effective remedy, it should not be solely relied upon as a “lifeline” for the Vietnamese market when sales fall short of expectations.

To become one of the most vibrant markets in Southeast Asia, Vietnam may require more comprehensive solutions rather than solely depending on periodic fee reduction programs.

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