Minh-Ngoc Nguyen
Research Expert covering Vietnam
Automotive industry in Vietnam - statistics & facts
Purchasing a car has always been considered a substantial investment in Vietnam. However, with increasing purchasing power stemming from economic improvement and the rising middle-class population, more Vietnamese are able to afford such vehicles. Vietnam’s automotive market is now among the fastest-growing in Southeast Asia. While still seen as a big-ticket item, cars are increasingly crowding the streets of Vietnamese cities, emerging as one of the main modes of transportation alongside motorcycles for many urban residents.
Correspondingly, foreign brands, especially Japanese and Korean manufacturers, dominate Vietnam’s automobile market due to their affordable price tags and low maintenance costs. In 2023, Mitsubishi, Hyundai, and Toyota were among the best-selling car models in Vietnam. With that said, it is not rare to spot a German automobile on Vietnamese local streets. Often seen as a symbol of luxury and prestige, European car brands have also won over a niche segment of affluent Vietnamese consumers.
On the other hand, there is a growing trend towards electric vehicles (EVs) in Vietnam. To support EV consumption, the government has implemented measures including tax rebates, investment in EV infrastructure, and support for local manufacturers. As a result, Vietnam was forecasted to reach one million EVs on the road by 2028. In addition, the introduction of VinFast in 2017, Vietnam’s first automobile maker, has significantly transformed the landscape of the country’s automotive industry after many years of being a net automobile importer. Specializing in electric vehicle manufacturing, the brand has been actively working towards introducing made-in-Vietnam electric cars to the global market. With ongoing efforts and the application of sustainable practices, Vietnam’s automotive industry is expected to be back on its growth track in the near future.
What cars are Vietnamese driving?
Since 2020, the volume of automobiles produced in Vietnam has witnessed gradual growth to meet domestic demand. However, the production of assembled automobiles by local manufacturers remains modest as it depends heavily on the imports of advanced parts. As a result, imported cars are widely popular in Vietnam due to the limited capacity and capability of the domestic sector despite notoriously high import taxes for foreign automotive vehicles.Correspondingly, foreign brands, especially Japanese and Korean manufacturers, dominate Vietnam’s automobile market due to their affordable price tags and low maintenance costs. In 2023, Mitsubishi, Hyundai, and Toyota were among the best-selling car models in Vietnam. With that said, it is not rare to spot a German automobile on Vietnamese local streets. Often seen as a symbol of luxury and prestige, European car brands have also won over a niche segment of affluent Vietnamese consumers.
Automotive market post-COVID-19 pandemic
The beginning of 2022 saw an improvement in the economic situation in Vietnam when the COVID-19 lockdown restrictions were lifted, leading to a higher intention among Vietnamese people to purchase big-ticket items, including cars. However, due to global inflation difficulties in 2023, many Vietnamese families experienced cuts in expenses. As a result, the production and sales volume of automobiles in the country slumped significantly that year after showing some signs of recovery in 2022.On the other hand, there is a growing trend towards electric vehicles (EVs) in Vietnam. To support EV consumption, the government has implemented measures including tax rebates, investment in EV infrastructure, and support for local manufacturers. As a result, Vietnam was forecasted to reach one million EVs on the road by 2028. In addition, the introduction of VinFast in 2017, Vietnam’s first automobile maker, has significantly transformed the landscape of the country’s automotive industry after many years of being a net automobile importer. Specializing in electric vehicle manufacturing, the brand has been actively working towards introducing made-in-Vietnam electric cars to the global market. With ongoing efforts and the application of sustainable practices, Vietnam’s automotive industry is expected to be back on its growth track in the near future.
