The End of the Road for Cheap Gas Cars: Can They Keep Up with the Urban Electric Revolution?

The Vietnamese auto market is experiencing a shift with the introduction of electric vehicles, and this is having an impact on the sales of gasoline-powered cars, particularly those in the compact A-segment. This segment, which includes both traditional passenger cars and small SUVs, currently offers only six models from Korean and Japanese brands. Not only are there limited options available, but sales figures have also been declining.

Struggling Sales

In the traditional passenger car category, the Hyundai Grand i10 has typically outsold its rivals, the Toyota Wigo and Kia Morning. Meanwhile, in the small SUV segment, the Kia Sonet has been the preferred choice over the Toyota Raize and Hyundai Venue. However, recent sales reports indicate that both the Grand i10 and Sonet are facing challenges. Kia Sonet sales dipped slightly to 424 units, while the Grand i10 saw a more significant drop to 325 units, a decrease of 36 cars from the previous reporting period.

Their competitors have also witnessed fluctuations in sales during the same period. The Toyota Raize and Hyundai Venue recorded sales of 339 and 224 units respectively. The Toyota Wigo found 295 new owners, while the Kia Morning sold 45 units. Overall, the A-segment gasoline-powered cars achieved a combined sales figure of 1,652 units in April, a slight increase from the 1,647 units sold in March. Despite this, the segment, led by the Grand i10 and Sonet, has witnessed a notable cooling-off in sales performance.

Cumulative sales for the segment from the beginning of the year stand at 5,761 units, with the Kia Sonet leading the way at 1,703 units, followed by the Hyundai Grand i10 at 1,123 units. In comparison, during the same period last year, the segment achieved total sales of 7,064 units, with the Kia Sonet selling 2,452 units and the Hyundai Grand i10 selling 1,570 units. This year, the Kia Sonet’s cumulative sales have reached 1,703 units, while the Hyundai Grand i10 has sold 1,123 units, reflecting a decrease in sales for both models compared to the previous year.

The Rise of Electric Vehicles

Interestingly, the decline in sales of gasoline-powered A-segment cars coincides with the introduction of urban electric vehicles such as the VF 3 and the Wuling Bingo. The VF 3, for example, began deliveries to domestic customers in August 2024 and ended the year with impressive sales of over 25,000 units. The VinFast VF 3 is now priced at 299 million VND after the company discontinued its battery leasing policy. The Wuling Bingo, on the other hand, entered the Vietnamese market in late 2024, offering two hatchback electric car models with a starting price of 399 million VND.

The introduction of urban electric vehicles like the VF 3 and Wuling Bingo coincides with the sales decline of gasoline-powered A-segment cars. Images: Phuong Lam, Phuc Hau.

Other notable urban electric vehicles in the market include the VinFast VF 5, priced at 529 million VND, and the Wuling Mini EV, starting at 197 million VND. Compared to their gasoline-powered A-segment counterparts, these electric vehicles offer similar price points but with the added advantage of lower operating costs, making them a more attractive proposition for consumers.

Wuling Motors Vietnam, the distributor of Wuling electric vehicles, highlights the significant cost difference between the Wuling Mini EV and a typical gasoline-powered A-segment car over a distance of 1,000 km. VinFast, on the other hand, is offering free charging for its electric vehicle owners until June 2027 at all V-GREEN public charging stations nationwide, effectively eliminating charging costs for two years.

VinFast’s free charging program eliminates operating costs for electric vehicle owners. Illustrative image: Phuc Hau.

The extension of the policy to waive registration fees for electric vehicles has also played a significant role in boosting their sales. This policy saves Wuling Mini EV buyers nearly 20 million VND in registration costs, while VF 3 owners benefit from a reduction of around 30 million VND. VinFast VF 5 buyers also enjoy substantial savings, with registration fees waived amounting to between 53 and 63 million VND, depending on the region. In the current economic climate, these savings are a significant factor in purchasing decisions.

In summary, the decline in sales of gasoline-powered A-segment cars and the growth in sales of urban electric vehicles reflect a shift in Vietnam’s automotive market. While A-segment gasoline-powered cars may not become entirely obsolete due to their specific customer base, their market share is likely to continue shrinking as electric vehicles gain momentum in the country.

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