The industry’s growth for 2012-2016 period was 38%, the highest rate in the South East Asia. About 45% of the new cars were registered in Hanoi and HCM City.
As of 2016, about 211,000 vehicles were registered in HCM City and 291,000 in Hanoi. 600,000 cars were sold in remaining provinces and cities.
Cars from Japan and South Korea were favoured in Vietnam. Customers now have more choice as more European car brands have appeared in Vietnam such as Renault and Volkswagen.
However, the car ownership ratio in Vietnam is only 16 cars for 1,000 people. This rate is lower than Malaysia’s 341 cars, Thailand’s 196 cars and Indonesia’s 55 cars.
According to Solidiance, one of the reasons is because prices are still high. Car manufacturing, as well as supporting industries, are still weak so Vietnam has to import completely built units. Moreover, poor infrastructure and constant congestion have discouraged people from buying cars.
It is predicted that the demand will continue to rise with steady economic growth and increasing personal incomes. Import taxes will be reduced or lifted from 2018 after Vietnam joins various trade agreements such as the ASEAN Trade in Goods Agreement. As a result, the car prices will fall and become more affordable.