According to the ASEAN Automotive Federation (AAF), 201,840 cars were bought from January to July. With the figure, Vietnam ranks fourth in the region in terms of car sales. It is the fastest growing market with a growth rate of 34.1 percent compared with the same period last year (+51,359 cars).

According to the Ministry of Industry and Trade (MOIT), the car ownership ratio in Vietnam remains at 23 cars per 1,000 people, among the population of nearly 100 million. Vietnam is considered a potential market for foreign auto manufacturers.

The Vietnam Automobile Manufacturer Association (VAMA) has estimated that 1 million cars will be manufactured and sold to the market a year by 2025. The figure is high compared with the current consumption of 400,000 a year, but analysts say, with the appearance of foreign giants in Vietnam, the goal is attainable. 

Market trends

Two years of the Covid-19 pandemic affected the Vietnamese automobile market but it has recovered rapidly. 

In December 2021, Cevo, a South Korean electric car brand, displayed VIMEXPO 2021, a two-seat electric car model with a small size.

Cevo said this was the first time they had brought a two-seat electric car to Vietnam. Prior to that, Cevo’s electric cars were sold only in the domestic market, and Vietnam was the first destination that the manufacturer chose for business expansion.

Cevo attended the exhibition to seek partners to manufacture and distribute products in Vietnam before reaching other regional markets.

If sold in Vietnam, Cevo’s electric cars will be mostly in the low-cost market segment with prices of VND200-240 million. In South Korea, the cars are priced at VND150 million thanks to a government subsidy.

In October, Cevo again returned to Vietnam under the framework of the seminar for Vietnam-South Korean business exchanges. The manufacturer wants to sell its cars to Vietnamese.

Chery, the brand with the largest number of car exports in China, has shown determination to return to Vietnam.  

It has been learning about the market and building its staff for more than a year.

Like its first entry into the Vietnamese market 13 years ago, Chery wants to find Vietnamese partners to cooperate with in the assembly of cars and expand its distribution network.

Sources said Geleximco may become Chery’s partner. The information has not been confirmed by the two sides, but Chery said Geleximco is one of the capable partners with whom it is negotiating.

It is expected that the automobile plant in Thai Binh will be developed with investment capital of up to $1 billion in two phases. In Phase 1, 2024-2030, the plant would have a production capacity of 50,000 cars per annum. In Phase 2, the capacity would double.

Chery has a good market share in China. If a new automobile joint venture is established, Vietnamese would have more choices of affordable cars.

Another foreign brand that is eyeing the Vietnamese market is Skoda from Czechia. It has a strategic business cooperation agreement with TC Motor. The signing ceremony for the agreement took place on October 7.

Vietnam was chosen by Skoda as the first country in Southeast Asia to set up assembly plants for domestic purchases and exports to regional markets. Skoda’s products have reasonable prices. In 2021, the manufacturer sold 1 million products worldwide. 

Skoda’s models, including Karoq, Kodiaq, Octavia and Suberb, are expected to sell in Vietnam in late 2023 under the mode of CBU. In the future, two B-size models, namely 

Kushaq (CUV) and Slavia (Sedan), will be assembled at its plant in Quang Ninh, by the end of 2024. Meanwhile, its first electric car models will be introduced in early 2026.

Tran Thuy