The number of enterprises operating in the automotive and supporting industries has increased continuously with the participation of enterprises of all economic sectors, which made a notable contribution to the growth of the automobile industry.
The localization rate of some domestically manufactured and assembled vehicle lines is quite high due to the improved supply of domestic supporting industry products in recent years. Trucks, passenger cars with 10 seats or more, and specialized vehicles produced domestically have achieved a high localization rate, reaching the set target to meet the domestic market.
The number of enterprises operating in the automotive industry and supporting industries for the auto industry has increased continuously with the participation of enterprises of all economic sectors, which made a notable contribution to the growth of the automobile industry. Currently, most of the major automobile manufacturers in the world including Toyota, Honda, Ford, etc. are present in Vietnam, which has led a number of satellite manufacturers and a system of foreign parts and components suppliers to invest in Vietnam.
Supporting industry for the automobile industry in particular has shifted towards gradually increasing the proportion of enterprises operating in the field of manufacturing equipment, components, and spare parts, and gradually reducing the proportion of enterprises operating in the field of assembling and manufacturing car body.
However, the localization rate for personal vehicles with up to 9 seats is still low. The set target is 30-40% in 2020, 40-45% in 2025 and 50-55% in 2030. However, so far, it has only reached about 7-10% on average, of which Thaco reached 15-18%, Toyota Vietnam reached 37% for the Innova model, much lower than the set target as well as than that of other countries in the region such as Thailand, Indonesia and Malaysia.
Auto parts and components currently produced in Vietnam are mainly labor-intensive parts with simple technology, such as seats, glasses, tires, and wheels. Vietnam has to be a net importer of most of the products high technological content and added value, especially important parts and components belonging to brake, clutch, transmission, and steering systems. To serve the domestic automobile assembly, in the period 2010 - 2016, Vietnam imported different types of spare parts and components, with an average total import value of about 2 billion USD per year, mainly from Japan (23%), China (23%), Korea (16%), and Thailand (16%).
The production value of supporting industries for the auto industry only accounts for about 2.7% of the total production value of the industry. Average production value growth is much lower than the average growth of the whole industry.
According to the General Statistics Office, in January 2022, the total number of domestically produced and assembled cars was 38,300, up 7.9% compared to December 2021. This was the 4th consecutive month that the number of domestically manufactured and assembled vehicles had a positive growth. The figure for January 2022 has far exceeded that in 2021 and equal to 11.7% compared to the same period in 2021.
The high growth in automobile output in the first month is a positive signal for the domestic auto market in 2022, when the whole country is safely adapting to the Covid-19 epidemic and gradually returning to a normal state. In addition, with the policy of 50% reduction in registration fees for domestically produced vehicles applied from December 1, 2021 to the end of May 31, 2022, domestic cars significantly increase their competitiveness compared to imported cars.
In contrast to cars, the number of motorbikes produced domestically in January 2022 decreased sharply. According to a report by the General Statistics Office, the number of motorcycles manufactured and assembled domestically in January 2022 was estimated at 294,000 units, down 17% compared to the previous month and reaching 99.9% over the same period last year.
According to the Vietnam Automobile Manufacturers Association (VAMA), sales volume in January 2022 reached 30,742 vehicles, down 34% compared to December 2021 but up 16% compared to the same month in 2021. This is also the highest car sales in January in the past 3 years.
VAMA shared that out of 30,742 cars sold in January, there were 17,782 assembled cars, accounting for 57.8% of the market share. About 12,960 imported cars were sold, just 960 more than in January 2021, showing that they were partly affected because they did not receive registration fee incentives.
With the sales results in January 2022, most of the members of VAMA that are distributing passenger cars have received increased growth compared to the same period in 2021. The car brand that received the strongest growth is Lexus with 214 vehicles sold (up 143%), Mazda (up 35%), Honda (up 25%). Meanwhile, Ford and Mitsubishi both recorded sales decreasing by 36% and 3%, respectively.
Comparing sales in the whole market, Hyundai brand still took the lead in January with 7,428 vehicles, followed by Toyota with 6,368 units. The 3rd position belongs to Kia with 5,445 vehicles. Honda sold 3,771 cars while Mitsubishi had 3,581 vehicles sold.
Automobile consumption in Vietnam increased sharply in the first month of 2022 due to many stimulus policies such as reducing registration fees for domestically assembled cars, which will last until the end of May 2022. This policy not only increases people's demand for cars, but also causes some imported car brands to lower prices or increase promotions to compete.
Source: MoIT, GSO, VAMA
Compiled by VietnamCredit