Vietnam's cheapest car segment continues to decline, waiting for a new wind

The lack of choice and declining purchasing power in the auto market has caused sales of the cheapest car models in Vietnam to continue to plummet.

After falling more than 25% last month, the gloomy market in April 2023 caused the consumption of small-sized, cheapest car models on the market such as Hyundai Grand i10 and Kia Morning to not only not improve but also decrease sharply.

For the second consecutive month, sales of Vietnam's cheapest car segment dropped by over 25%.

According to data from the Vietnam Automobile Manufacturers Association (VAMA) as well as TC Motor - the assembly and distribution unit of Hyundai cars in Vietnam, in April 2023, total sales of small cars in class A in Vietnam reached only 618 vehicles, down 216 vehicles, equivalent to 26% compared to March 2023. This is the second consecutive month that sales of the cheapest car segment in Vietnam have decreased by over 25%. This result also makes small cars in class A the segment with the lowest sales in the market.

In addition to the reasons mentioned above such as limited choice, models with few equipment and features, the lack of competitive motivation, leading to slow change, is also a factor that makes names like Hyundai Grand i10 and Kia Morning gradually lose their appeal. Because, in the context of rapidly changing technology and car design, the two cheapest Korean car models in Vietnam have not been improved or upgraded in more than a year.

Therefore, although names like VinFast Fadil, Honda Brio... have left to give up the "stage" to Hyundai Grand i10, Kia Morning, so far the sales of the Korean car duo have not improved. In April 2023, only 494 Hyundai Grand i10s were delivered to Vietnamese customers, 170 cars lower than the previous month and down 60% compared to the same period last year.

Kia Morning was even more "miserable" when in the whole month of April 2023, only 124 cars were delivered to customers, down 46 cars compared to the previous month. Thereby, closing the first 4 months of 2023 with total sales of only 603 cars, down 73% compared to the same period last year.

Without changes in design, technology and sales policies from assemblers and distributors, it is likely that the position of the Korean car duo in the cheapest car segment in Vietnam will be difficult to maintain. Because at the end of April, VinFast suddenly launched the VinFast VF5 electric small car model. This pure electric car model has a price of only 458 million VND without battery, considered the cheapest electric car model of VinFast, and is also a replacement for VinFast Fadil in the A-class small car segment.

Previously, the world's best-selling electric car model in recent years - Wuling HongGuang MiniEV was also announced to be assembled and distributed by the GM - SAIC - WULING joint venture and its partner in Vietnam. And soon, the low-cost car segment in Vietnam will have the return of Toyota Wigo. This model entered the Vietnamese market in 2018, but from mid-2022, Wigo had to temporarily stop distribution due to not meeting new emission standards in Vietnam. According to the announcement of Toyota Vietnam (TMV), on May 24, TMV will launch the new generation Toyota Wigo to the market.

Toyota Vietnam will launch the new generation Toyota Wigo on May 24.

The presence of the above names not only helps consumers have more new choices, increasing competitiveness in the cheapest car segment in Vietnam, but is also expected to help this segment regain growth momentum as well as position in the market.

Cumulatively, in the past 4 months of 2023, total sales of models in the cheapest car segment in Vietnam reached 3,342 vehicles, down 11,364 vehicles, equivalent to nearly 77.3% compared to the same period last year. Of which, Hyundai Grand i10 temporarily took the lead with 2,739 vehicles sold on the market.