According to recent data from the Vietnam Automobile Manufacturers Association (VAMA), the first half of 2024 saw a 6% decline in vehicle sales among its members compared to the same period last year. As the market faces ongoing difficulties, the outlook for the remainder of the year remains uncertain.

According to VAMA, total sales of its members in the first six months of 2024 reached 115,651 units, down 6% year-on-year. When including the sales of non-VAMA members and imported vehicles, the total market sales reached 137,337 units, a 2% decrease compared to the same period in 2023.

Hyundai Thanh Cong reported a 13% drop in sales, selling 24,381 units in the first half of the year. Meanwhile, VinFast showed a significant increase, selling nearly 22,000 units, up 92% from the previous year.

Despite these mixed results, the overall market remains sluggish. The estimated total sales for the first half of 2024 is around 200,000 units, similar to the first half of 2023 but significantly lower than the 250,000 units sold in the first half of 2022.

The weak demand persists despite various efforts to stimulate the market. The gloomy atmosphere continues to dominate the industry, with major brands like Toyota, Hyundai, Kia, and Mazda experiencing negative growth.

In response to the industry's difficulties, the Prime Minister directed the Ministry of Finance in late April 2024 to propose a reduction in the registration fee for domestically produced and assembled cars, with the expectation that this would be presented to the government in May 2024. Many predicted a 50% reduction in the registration fee for domestic cars from July 1, 2024, for six months. However, the Ministry of Finance recently sought opinions from the Ministry of Justice on the draft decree, considering not reducing the fee due to potential violations of international commitments and retaliation risks from countries importing Vietnamese goods.

Without support measures, the auto market's recovery seems bleak. Companies forecast that total vehicle sales in 2024 will be around 420,000 units, similar to 2023, but far below the 520,000 units sold in 2022.

After reaching over 520,000 units in 2022, the industry had hoped for continued growth, targeting over 600,000 units in 2023 and about 700,000 units in 2024. However, the reality has been the opposite, with a 23% market drop in 2023, bringing the total to around 420,000 units, and 2024 is projected to maintain this level.

A few years ago, the Ministry of Industry and Trade forecasted that Vietnam's auto market would reach 800,000 units by the end of 2025. However, given the current trends, this forecast appears unlikely.

Companies had hoped that a growing market would foster the development of the auto industry. Many had planned investments to meet this demand, but the disappointing reality has derailed these plans.

According to the General Statistics Office, domestic car production in the first six months of 2024 reached 144,000 units, down 3.2% year-on-year. At this rate, the annual production is estimated to be around 350,000 units for 2024. The auto industry needs a large scale and high production volume to thrive. Without growth, Vietnam's auto industry may struggle to move beyond simple assembly.

PV