Vietnam’s new vehicle market experienced a significant 50% year-over-year increase in November 2024, reaching 39,608 units compared to 26,439 units in the same period last year, according to the Vietnam Automotive Manufacturers Association (VAMA). This data excludes sales figures from major players like Mercedes-Benz, Hyundai, Tesla, Nissan, emerging Chinese brands, and domestic electric vehicle manufacturer VinFast, highlighting the potential for even greater market growth.
Table Content:
VAMA members attribute the recent surge in vehicle deliveries to a temporary 50% reduction in the registration tax on locally assembled vehicles implemented by the government in September. This tax break, coupled with aggressive promotional campaigns and discounts offered by dealers, significantly boosted consumer demand. However, with the tax incentive expiring in November, concerns remain about the sustainability of this market rebound.
Vietnam’s robust economic growth, marked by a 7.4% year-on-year increase in the third quarter fueled by a 16% surge in exports, provides a positive backdrop for the automotive sector. Strong domestic consumption, expanding tourism, and a 9% growth in industrial output further contribute to this positive economic momentum.
Year-to-Date Performance and Key Players
VAMA data for the first eleven months of 2024 reveals a 12% overall market expansion to 268,576 units, with passenger vehicle sales growing by 8% and commercial vehicle sales rebounding by a significant 23%. Truong Hai (Thaco) Group, a major player in the commercial vehicle segment, experienced a 3% decline in year-to-date sales despite a 14% increase in Thaco commercial vehicle sales. This decline was primarily due to reduced sales of Kia and Mazda vehicles.
Toyota saw a 20% increase in sales, driven by strong demand for the Hilux pickup truck. Ford and Mitsubishi also recorded substantial growth, with sales up 16% and 40% respectively, thanks to the popularity of models like the Ranger, Everest, Transit, and the newly launched XForce SUV. Honda’s sales climbed by 31%, while Suzuki experienced a 21% decline.
VinFast and Hyundai’s Notable Performance
VinFast, while not included in VAMA data, reportedly more than doubled its domestic sales to approximately 62,000 units in the first eleven months, remaining on track to achieve its global sales target of 80,000 units. Hyundai, another significant player excluded from VAMA figures, sold 48,546 vehicles in the first ten months of the year, underscoring the substantial contribution of non-VAMA members to the overall market.
Government Support for Electric Vehicles
The Vietnamese government’s commitment to fostering the electric vehicle (EV) sector is evident in its decision to maintain zero registration tax for battery electric vehicles (BEVs) until 2026. Coupled with low special consumption taxes and incentives for component imports and charging equipment, these policies aim to attract significant investment in Vietnam’s burgeoning EV market.
In conclusion, Vietnam’s automotive market witnessed remarkable growth in November, fueled by a combination of government tax incentives, dealer promotions, and a strong overall economic performance. While the expiration of the tax break raises questions about future growth, the long-term prospects for the Vietnamese auto market, particularly in the EV segment, appear promising thanks to ongoing government support and strong consumer demand.
