The Passenger Car Market – Market Overview
The Passenger Car Market
Vietnam Domestic Motor Vehicles Sales (last 10 years)
- In Vietnam, potential market seems to have a wider distribution, not only in Hanoi and Ho Chi Minh City, but also in other big cities like Hai Phong, Da Nang… These market characteristics combining with other factors, i.e. demographic dividend, infrastructure, GDP per capital growth
- Vietnam to become a high potential for automobile market in coming years.
The Vietnam Passenger Car Market
The raising trend of Vietnam passenger car market specially from the upsurge noticed in 2015 in terms of average sales units have become double in 2019.
- Vietnam’s automobile market has unique characteristics, which differentiates from those of other ASEAN countries. For instance, Vietnam has two major markets, Hanoi and Ho Chi Minh City, but others have only one big market in capital city (Indonesia may have two, Jakarta and Sulabaya).
Vietnam Domestic Motor Vehicles Sales (Last 1 year)
The Passenger Car & Indexes
The Booming Economy Reflecting in Increase in Car Penetration
Th high growth rate and motorization rate is approaching a threshold of 50 is another positive factor for automobile market development in Vietnam.
*Car (PC & MPV/SUV)
Penetration (Per 1000) Urban Population
Base : Urban Population
*The growth of automobile market is divided into five stages, including(i) pre-motorization (when the number of vehicles per 1,000 inhabitants < 50), (ii) motorization (> 50), (iii) motorization matured (> 250), (iv) multi-ownership (> 400), and (v) multi-ownership matured (> 500). The market booming happens in motorization stage, and slowdown in next stages.
What is supporting the passenger car in growth market?
The Rising Middle-Class Income Group
More than 50% of the households have income more than US$400/- amounting to improved living standards. They specifically look towards:
- Safe mode of travel for themselves and family.
- Leading to family time.
- A mode for fun, entertainment and travel.
The increase in Urbanisation Demands Convenience
Vietnam with increase in migration from rural to urban have significantly contributed towards the growth of car industry.
- Improved & wider infrastructure development projects in key cities.
- The living conditions have rapidly transformed with higher rise, apartments flourishing around.
- The rise in transportation services (Grab) have seen to support the people movement as well as additional source of earning.
What’s Plan Next?
The Middle-Class Spending On Rise as well, higher indication towards…
The Purchase is driven by Price & Quality
What’s Supporting the Vietnam Economy?
The Predicted Passenger Car Market
Vietnam Passenger car market inclusive of MUV/SUV would grow faster after regaining the momentum in 2018, and would cross 500,000 units in 2025 as projected by Ministry of Transport & Industries much because of the following factors:
- Vietnam nearing the motorised segment (>50 car per 1000 inhabitants).
- Growing middle-class segment.
- Growing younger age group (Age 20+)
- Growing income and spending pattern with improvement in economy.
- The continuous y-o-y lowering on international tax and tariffs and its subsequent impact on prices of car.
- More localised production of automobile ancillary units in Vietnam leading to decrease in cost of car.
- The predicted estimates reflects industry crossing 200,000 + units in 2019.
Source : Secondary Research (GSO, VAMA, Euromonitor)
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