2022 was a prosperous year for automobile manufacturers with more than 500,000 cars sold. However, experts say the market will not maintain a high growth rate in 2023, though domestically assembled products and imports will continue to enjoy preferential taxes and fees.

In Q4 2022, the automobile market was affected by commercial banks raising lending interest rates and tightening lending to fund car purchases. This led to sharp falls of 6-70 percent in purchasing power.

Signs of recession slowed down the finance and real estate markets. The two business fields create high cash flow and stimulate other business fields, including the automobile market.

There was a sharp two-digit fall in car sales in the last two months of 2022 compared with the same period in 2021. The last months of the year are usually the time for a sale boom.

Since January this year, many manufacturers have raised selling prices to cover input cost increases caused by car part and semiconductor chip shortages. So car sales in 2023 will still be sluggish.

Imports down

According to the Vietnam Automobile Manufacturers’ Association (VAMA), its member companies sold 404,635 products in 2022. However, the growth in the last two years in imports caused sales of imported and domestically assembled products to be 44 percent and 56 percent, respectively (178,148 vs 226,487).

However, analysts believe that imports will decrease in 2023 as the bestsellers, including Ford Ranger, Toyota Veloz Cross and Hyundai Creta, can now be assembled domestically.

Vietnamese automobile manufacturers Thaco, TC Motor and VinFast are expanding their factories in Vietnam to increase assembly capacity for domestic demand and export.

The hybrids

The automobile market saw many electric car models last year. Manufacturers imported models in the domestic market, including Hyundai Ioniq 5, Mercedes EQS, Audi e-Tron GT, MG Marvel R, MG 4, Toyota bZ4X and VinFast VF 8.

However, no further move has been taken to boost the sale of electric vehicles because many Vietnamese still have doubts about the usefulness of the models, while the selling prices remain high and charging stations are only available in large cities.

Therefore, experts believe that hybrids will be a trend in 2023. 

Hoang Hiep