New vehicle sales in Vietnam plunged by a further 51% to 19,266 units in May 2023 from much stronger year earlier volume of 39,469, according to wholesale data from the Vietnam Automotive Manufacturers Association (VAMA).
That was the seventh consecutive month of declining sales following last year’s strong rebound from pandemic lows, reflecting a sharp slowdown in economic growth in the country. GDP rise slowed to 3.3% in the first quarter, after dropping to 5.9% in the previous quarter, compared with 8% in the whole of 2022, reflecting slowing consumer spending and exports.
The central bank has cut its refinancing rate by 100 basis points to 5% in the last two months to help improve liquidity in the domestic economy following sharp hikes last year aimed at containing surging price inflation.
Vehicle sales in the first five months of the year fell 38% to 100,733 units from 163,399 in the same period of 2022 with sales of passenger vehicles dropping by 43% to 75,235 units while commercial vehicle sales were down 16% at 25,498.
The association’s data did not include sales of some brands, including Mercedes-Benz, Hyundai and the domestic VinFast, which together accounted for an estimated 23% of total vehicle sales last year.
Truong Hai (Thaco) group, local assembler and distributor of Kia, Mazda, Peugeot and BMW-Mini and a major player in the commercial vehicle segment, reported a 49% plunge in group sales to 34,056 units year to date (YTD).
That included a 56% drop in Kia sales to 13,951 units; a 35% fall in Mazda sales to 11,339 units; and an 82% plunge in Peugeot sales to 1,047 units; while Thaco truck sales were down 35% at 6,569 units.
Toyota sales fell 43% to 21,547 vehicles in the five month period; benefiting Ford which reported an 87% surge to 14,302 units, thanks mainly to strong demand for its locally made Ranger pickup truck, while Honda sales fell 56% to 8,069, Mitsubishi 10,583 (-33%) and Suzuki 6,716 (-15%).
A number of foreign brands have announced plans to enter Vietnam’s electric vehicle market, which will inevitably put further pressure on domestic start-up VinFast. China’s BYD said it planned to build an EV plant in the country, while Hyundai launched the Ioniq 5 last month and Mercedes-Benz said it would introduce three EVs this year.
