AsemconnectVietnam - The domestic automobile market bounced back in May after a month of low sales as manufacturers cut selling prices amid weak demand.

The newly released reports by the Vietnam Automobile Manufacturer Association (VAMA) and TC Group showed that the car sales bounced back in May after the gloomy April.
Mercedes-Benz and VinFast did not show their figures. Hyundai announced its sales separately. The statistics about the entire market released by VAMA were the sales of 17 of its member companies and imports of non-VAMA manufacturers.
VAMA reported that 25,794 automobiles of all kinds were sold in May, an increase of 6 percent over April and 24 percent over May 2023. Meanwhile, TC Group reported that 4,914 Hyundais were sold in the same month, up 14.9 percent over April and 37.3 percent over May 2023 (3,579 cars).
The total number of automobiles sold in May as announced by VAMA and Hyundai was 30,708, up 7.27 percent over April (28,626) and 26.4 percent over the same period last year (24,301).
Car-buying habits leaning towards import models
New figures show unusual movement in the sales of cars in Vietnam, with consumers seemingly switching to imported over locally-built vehicles, increasing calls to bring in domestic sales incentives quickly.
According to a Vietnam Automobile Manufacturers’ Association (VAMA) report released last week, the sales volume in May reached almost 25,800 vehicles, including 18,230 passenger cars, nearly 7,300 commercial vehicles, and 267 specialised vehicles.
Sales of completely built up (CBU) cars increased over the last five months, while assembled car output slowed down.
The sales volume of domestically assembled cars reached almost 12,000 cars, up only 0.02 per over the previous month, while the sales volume of imported CBU cars was over 13,800 cars, up 12 per cent over the last month. This was the second consecutive month that the consumption of imported cars has surpassed domestically assembled vehicles.
This is considered unusual in the domestic car market, where assembled cars often overwhelm imported cars in terms of sales volume through each reporting period.
Automobile market will see a big influx of Chinese car brands
The Vietnamese automobile market is experiencing significant transformations with the entry of Chinese car brands, according to experts.
Brands like Omoda, Jaecoo, BYD, Haval and Lynk & Co. are aggressively pushing into the market, aiming to capitalise on Việt Nam's growing demand for cars as the country is undergoing an automobilisation phase with rising average incomes.
Chinese car manufacturers are rapidly establishing showrooms and dealerships across Việt Nam. For example, BYD plans to open 50 showrooms by mid-2024 and Haval aims to have 25-30 dealerships this year. This aggressive expansion contrasts with the cautious approach of many traditional international brands.
Chinese automakers are investing heavily in local production facilities. Omoda and Jaecoo will soon start operating a factory with an annual capacity of 200,000 cars in Thái Bình Province. BYD is also considering building an automobile factory in Việt Nam.
The Chinese brands are offering a range of vehicles including petrol models, plug-in hybrids and pure electric vehicles (BEVs). This diverse product lineup is aimed at catering to various segments of the Vietnamese market.
Chinese brands are particularly targeting young Vietnamese consumers who are quick to adopt new technologies, including electric vehicles (EVs). BYD, for example, aims to leverage its expertise in EVs to penetrate the market further.
While these brands have ambitious goals to capture a significant market share in Việt Nam (with Omoda and Jaecoo aiming to have ten per cent of the market by 2028), hitting those targets in a competitive market will require time and sustained effort.
Extends tax payment deadline for domestically manufactured cars
The government has extended the deadline for special consumption tax (SCT) payments for domestically manufactured and assembled cars.
According to the decree, the extension of the SCT payment deadline applies to amounts arising in the May, June, July, August, and September 2024 tax periods for automobiles manufactured or assembled in Vietnam. SCT payments have been extended to November 20 this year at the latest.
This decree takes effect from June 17, and is the sixth time the SCT on domestically manufactured and assembled cars has been extended to support businesses.
Last year, this policy was also applied to facilitate domestic enterprises, with a tax-deferred payment of up to VND8.1 trillion ($318 million). The SCT amount extended in the first three months of this year reached VND5.2 trillion ($204 million).
According to the Ministry of Finance (MoF), the total amount of delayed SCT payments on cars manufactured and assembled in Vietnam will reach VND8.56 trillion ($336 million) this year.
T.Huong
Source: Vitic