“Vietnam’s Automotive Assembly Boom: Can the Country Become the Leader in Southeast Asia?”

According to the latest report by the General Statistics Office, the output of domestically-assembled cars in Vietnam in May is estimated at 37,700 units, a 54.6% growth compared to the same period last year.

From the beginning of the year, the total output of domestic cars in Vietnam is estimated at 183,400 units. According to data from the General Statistics Office, the output of domestically-assembled cars in the early months of this year has increased by over 70% compared to the same period in 2024.

Output Increase, More New Factories

Data shared by the General Statistics Office shows that the output of domestic cars in Vietnam up to May is relatively stable.

Not showing a clear growth trend over each period, the output of cars at factories in Vietnam has increased and decreased continuously, even decreasing quite strongly in the February report – the time of the Lunar New Year holiday.

The number of cars assembled in Vietnam currently includes various brands, from Vietnamese to Asian, European, and American carmakers.

Some notable names currently producing and assembling cars in Vietnam include VinFast, Toyota, Hyundai, Ford, Mitsubishi, Mazda, Kia, Peugeot, MINI, BMW, and Mercedes.

The list of car brands with products assembled in Vietnam has recently been added to with Skoda, after the European car brand’s factory in Quang Ninh province was officially completed in March.

The Skoda Kushaq is the first product of the Skoda Quang Ninh factory. According to the distributor, this production facility will also be in charge of assembling another Skoda model in the future.

The VinFast factory in Ha Tinh province was also recently inaugurated after 7 months of construction. According to the company, the VinFast factory in Ha Tinh is the fifth production facility globally, with a designed capacity of 200,000 cars per year.

The VinFast Ha Tinh factory will be responsible for producing small urban electric car models such as the VinFast VF 3, VinFast Minio Green, and the EC Van electric van. The Vietnamese electric carmaker said that the products of this factory will also be exported to international markets.

The VinFast factory in Ha Tinh province has a designed capacity of 200,000 cars per year. Photo: VinFast

According to Tri Thức – Znews, the new Chery-Geleximco joint venture factory in Hung Yen province will soon be inaugurated. The Omoda and Jaecoo branded cars produced at this facility are expected to be launched in Vietnam in the second quarter of 2026.

Another Chinese automotive group, Geely, also plans to build a factory in Vietnam. Despite the statement of Chairman Li Shufu, Geely’s factory in Vietnam is expected to be inaugurated in 2025.

Previously, the Mercedes-Benz factory in Ho Chi Minh City faced the risk of permanently ceasing operations after three decades of presence. However, this project has been extended for another five years from April 14, allowing the German luxury carmaker to continue assembling cars in Vietnam.

Still Far Behind Thailand

Despite the positive news, Vietnam’s automotive industry has not yet been able to grow strongly to achieve high output like that of Thailand or Indonesia – the automotive manufacturing hubs of Southeast Asia.

Data collected by the ASEAN Automotive Federation (AAF) shows that in the first eleven months of last year, Vietnam still ranked fourth in Southeast Asia in terms of domestic car output. The countries ranked above Vietnam are Thailand, Indonesia, and Malaysia.

Thailand still has the highest domestic car output in Southeast Asia. Photo: GAC Aion

Of these, Thailand’s domestic car output decreased by 20.2% compared to the first eleven months of 2023 but still reached over 1.63 million units, showing the large scale of the automotive industry in the country.

According to the latest data shared by the Bangkok Post, Thailand’s domestic car output in May grew by 10.32% compared to 2024. This is the first time in 22 months that Thailand’s automotive industry has seen positive output growth.

However, the total domestic car output in Thailand from the beginning of the year still decreased by 7.82% compared to the same period last year. The Bangkok Post cited data from the Federation of Thai Industries (FTI) saying that Thailand’s car production and assembly lines have completed 594,492 vehicles.

The output gap between Vietnam and Thailand at the moment is still quite large. If a comparison is to be made, Thailand’s output of nearly 594,500 vehicles is more than three times the number of cars produced in Vietnam during the same period.

One reason for this lies in the existing scale of the Vietnamese car market. Data from the Vietnam Automobile Manufacturers Association (VAMA) shows that in 2024, car sales in Vietnam reached 340,142 units. If VinFast and Hyundai’s sales are included, Vietnamese bought about 494,300 cars of all kinds.

Meanwhile, car sales in Thailand last year decreased by more than 26% but still reached more than 572,670 units. Vehicle consumption in Indonesia during the same period even exceeded 865,720 units.

The development of the car market in Thailand and Indonesia is one of the reasons why manufacturers prioritize these countries when looking for factory locations.

Of course, the incentive policies of each country at a specific time also have a certain impact, in addition to the strategies of the carmakers.

The scale of Vietnam’s car market may be the reason why not many carmakers are pushing for local assembly. Illustrative image: Phuong Lam

In general, Vietnam is still a favored location for many carmakers to set up production facilities. The recent presence of Skoda, Chery, and Geely is a testament to this. Chery, in particular, has identified Vietnam as the main automotive manufacturing hub in Southeast Asia.

Thus, Vietnam’s automotive industry still has development potential. However, the road to becoming the new “automotive factory” of the region is still quite long.