Brian Jeffrey
Recent data from the Vietnam Automobile Manufacturers Association (VAMA) indicates a 6% drop in vehicle sales in the first half of 2024 compared to the same period last year. The market is facing challenges, and the outlook for the rest of the year remains uncertain.
VAMA reported that its members sold 115,651 units in the first half of 2024, showing a 6% decline from the previous year. Total market sales, including non-VAMA members and imported vehicles, reached 137,337 units, a 2% decrease compared to the same period in 2023.
Hyundai Thanh Cong experienced a 13% decrease in sales, while VinFast saw a substantial increase of 92%, selling nearly 22,000 units in the first half of the year.
Despite some fluctuations, the overall market continues to be slow. Total sales for the first half of 2024 are estimated to be around 200,000 units, similar to 2023 but lower than the 250,000 units sold in the first half of 2022.
Efforts to boost the market have not been successful, with major brands such as Toyota, Hyundai, Kia, and Mazda facing negative growth trends.
The government considered reducing the registration fee for domestically produced and assembled cars to stimulate the market. However, due to concerns about international commitments and potential risks from importing countries, the fee reduction might not materialize.
Without adequate support, the auto market’s recovery prospects appear dim. Companies predict total vehicle sales for 2024 to be around 420,000 units, similar to 2023 but lower than the 520,000 units sold in 2022.
In the past, there were expectations of continuous growth in the market, targeting over 600,000 units in 2023 and 700,000 units in 2024 following the 520,000 units sold in 2022. However, the reality has been disappointing, with a 23% market drop in 2023 and similar projections for 2024.
Initial forecasts suggested Vietnam’s auto market would reach 800,000 units by the end of 2025, but current trends make this forecast seem unlikely.
Companies anticipated market growth to spur industry development and had made investment plans to meet demand. However, with the market underperforming, these plans have been disrupted.
In the first half of 2024, domestic car production decreased by 3.2% year-on-year, totaling 144,000 units. The industry’s annual production is projected to be approximately 350,000 units for 2024. Sustainable growth and high production rates are essential for Vietnam’s auto industry to advance beyond basic assembly.
