First quarter sales decline causes Vietnamese auto market to lose top 4 position in region

Car sales in the first quarter of 2023 in the Vietnamese market reached 70,392 vehicles. Photo: Anh Tu

According to data recently released by the Association of Southeast Asian Manufacturers (AAF), after the first 3 months of 2023, Indonesia continues to be the largest automobile market in Southeast Asia with sales of 282,125 vehicles, an increase of 7% over the same period last year.

Thailand ranked second with a 6.1% decrease in car sales compared to the first quarter of 2022, reaching only 217,073 vehicles after the first three months of the year. Meanwhile, Malaysia remains the third largest car market in the region with sales of 192,474 vehicles in the first quarter of 2023, despite the market growing at 20.4%.

Car sales in the Philippines reached 97,284 units. This figure is 30.1% higher than the same period last year, and is the highest growth rate in Southeast Asia, making this island nation ranked 4th in the region.

With sales of only 70,392 vehicles in the first quarter of 2023 and a decline of 22.2%, the Vietnamese auto market lost its 4th position in the region in the same period and kept a large gap in sales compared to the Philippines.

Similar to the sales target, the number of domestically produced cars in the Philippines in the first quarter of the year also achieved strong growth of 68.6%, the highest in Southeast Asia according to data provided by AAF.

However, the Philippines has not been able to surpass Vietnam when our domestic automobile production line, despite a 29.5% decrease in productivity, still produced 38,410 vehicles after the first 3 months of the year, while the Philippines produced 30,582 cars.

Production of assembled and imported cars in Vietnam decreased in the first quarter of the year. Photo: Anh Tu

Of the total sales of more than 70,000 vehicles that the Vietnamese automobile market achieved in the first quarter of the year, a report by the Vietnam Automobile Manufacturers Association (VAMA) showed that domestic cars only achieved a consumption of 36,692 vehicles, 34% lower than the same period last year. Imported cars also had a consumption of only 33,700 vehicles after the first 3 months of the year.

Most likely, the poor consumption of the Vietnamese auto market in the early stages of the year is the reason for the slowdown in both domestic auto production and assembly as well as imports from abroad.

The number of imported cars into Vietnam is also showing signs of slowing down in the early stages of the second quarter of 2023. According to a report by the General Statistics Office, the estimated number of cars arriving at Vietnamese ports in April was only 12,500, down 17.9% in quantity compared to March and also 5.2% lower than the same period last year.

Faced with that situation, the Ministry of Industry and Trade has just sent a document to the Ministry of Finance regarding the policy of reducing 50% of registration fees for domestically produced cars as well as extending the payment of special consumption tax applicable until the end of 2023.