The Vietnamese automobile market faced numerous challenges in the first half of 2024 but managed to regain momentum in the final months of the year, thanks to government stimulus policies, the launch of new car models, and a growing wave of electrification.

A successful sprint to the finish

The year 2024 ended with total automobile sales reaching nearly 500,000 units, a 12.6% increase compared to 2023. This achievement is regarded as a remarkable comeback for the automotive industry after a turbulent year.

Looking back, this is a significant accomplishment, especially considering the market faced a 25% decline in sales in 2023.

During the early months of 2024, the economic difficulties led consumers to tighten their belts, reducing spending on big-ticket items, including cars.

In the first half of the year, vehicle sales remained sluggish. Monthly sales across the market rarely exceeded 27,000 units, despite manufacturers and dealerships offering promotions and discounts to clear 2023 inventories.

By the end of August, data from the Vietnam Automobile Manufacturers’ Association (VAMA) showed total market sales reaching only 188,997 units, a modest 2.4% growth compared to 2023. This led many industry insiders to lose confidence in a strong year-end recovery.

However, a short-term government policy to reduce registration fees by 50% for three months provided a much-needed boost.

As a result, sales in the final four months of the year surged, with some months exceeding 44,000 units.

During this period alone, 151,144 vehicles were sold, equivalent to 80% of the sales recorded in the first eight months.

Vietnam Motor Show returns

Despite a bleak outlook in the first half of 2024, the Vietnam Motor Show managed to return after a one-year hiatus.

Many speculated the event would be canceled again, as major brands like Ford, Mercedes-Benz, Lexus, and Audi pulled out.

However, the show went on as planned, welcoming several new automobile brands and incorporating motorcycle and scooter manufacturers.

This expanded scope offered visitors a more diverse and exciting experience.

Several automakers used the event to launch new models and promotional sales campaigns, injecting energy into the market despite the absence of some prominent brands.

The Vietnam Motor Show 2024 played a vital role in revitalizing the market during the year’s final months.

A surge of Chinese automobile brands

Between 2008 and 2011, Chinese car brands entered the Vietnamese market but struggled due to unclear business strategies and subpar products that failed to compete with Japanese and Korean rivals.

In 2024, however, Chinese automakers returned with a more strategic and robust approach.

This time, their market entry was meticulously planned, from selecting local business partners to crafting competitive pricing strategies and positioning their products effectively.

A total of eight Chinese brands debuted in 2024, with five - BYD, GAC, Aion, Omoda, and Jaecoo - launching their first vehicles.

As of now, 11 Chinese brands operate in Vietnam, surpassing the number of Japanese brands and dominating the market.

Projections suggest that in 2025, at least three to four more Chinese brands will enter Vietnam, along with a variety of new models across different segments, particularly affordable vehicles.

This influx will provide Vietnamese consumers with an even broader range of options.

The rise of Vietnamese automobile brands

While the electric vehicle (EV) market in Vietnam remains in its infancy, hindered by a lack of charging infrastructure and high prices, local automaker VinFast has made bold moves to address these challenges.

Recognizing these obstacles, VinFast shifted its focus to developing affordable EV models tailored to both private users and commercial services, including taxis.

In April 2023, VinFast launched the VF 5, followed by the VinFast VF 3, which began deliveries in August 2024.

The mini electric vehicle VinFast VF 3 became a market sensation, selling over 25,000 units within just five months. Meanwhile, the VF 5 recorded annual sales of 32,000 units.

VinFast announced that it delivered more than 87,000 EVs in 2024, surpassing major competitors like Toyota and Hyundai to become the best-selling automaker in Vietnam.

Recently, the company unveiled four new models in its Green series, designed specifically for commercial transportation. Coupled with a free charging policy for customers, VinFast is poised for continued growth in 2025.

Ngo Minh