Vietnamese Auto Industry Rises as Global Player with Sustainable Growth Trajectory
Hanoi, The Gulf Observer: The Vietnamese automotive industry has showcased remarkable advancements, transitioning from a reliance on imported vehicles to becoming a significant player in the global supply chain. Local experts have highlighted its potential to drive economic growth, underpinned by strategic policies and increasing global recognition.
Historically dependent on importing complete cars to access advanced technologies, Vietnam has shifted towards domestic production and exports. By the end of 2022, the industry marked a milestone when VinFast exported its first batch of 999 VF8 electric cars to the United States. This achievement demonstrated that Vietnamese-made vehicles meet the stringent safety and quality standards of highly regulated markets. Subsequently, VinFast expanded its reach to Europe and Southeast Asia, and by 2024, it was ranked 28th globally in battery-powered electric car sales, with 44,260 units sold—surpassing established brands such as Honda and Subaru.
Foreign automakers are also recognizing Vietnam’s potential as a manufacturing hub. Hyundai Thanh Cong recently exported Hyundai Palisade SUVs to Thailand under the ASEAN Trade in Goods Agreement (ATIGA), leveraging a zero per cent import tax incentive enabled by a 40 per cent localisation rate. This reflects the growing capabilities of Vietnam’s auto support industry, which supplies critical components and boosts price competitiveness.
Domestic manufacturers are emphasizing local assembly, with long-standing operations like Mercedes-Benz Vietnam assembling popular models such as the C-Class and GLC 200 at its Ho Chi Minh City facility since 1995. Recent commitments, including a five-year extension of its operations, highlight the industry’s stability and adaptability to shifting market dynamics.
Emerging partnerships further underline the sector’s diversification. A joint venture between GM (USA) and SAIC-WULING (China) has collaborated with TMT Motors to produce electric vehicles in Vietnam, including the Wuling Mini EV and Wuling Bingo, from its facility in Hưng Yên Province. Meanwhile, Geleximco Group has announced plans to establish a Chery car production hub in Thái Bình Province, aiming for an annual capacity of 200,000 vehicles to serve both domestic and international markets.
Record Sales and Strategic Goals
The sector’s momentum is evident in the October sales figures, which reached a record-breaking 38,761 units, according to the Vietnam Automobile Manufacturers Association (VAMA). Government policies, such as a 50 per cent reduction in registration fees for locally assembled vehicles, have played a pivotal role in boosting consumer demand.
Looking forward, Vietnam’s draft strategy for its automobile industry outlines ambitious goals, including producing over 1.5 million vehicles annually by 2035. Exports are projected to reach 90,000 units annually, while locally assembled vehicles are expected to meet 78 per cent of domestic demand.
Focus on Sustainability and Innovation
The shift toward electric and low-emission vehicles aligns with global environmental priorities, supported by innovation in AI and green technologies. Associate Professor Dr. Nguyễn Thường Lạng from the National Economics University underscores the importance of a stable market, competitive profit margins, and infrastructure enhancements to sustain growth.
With rising income levels, improved living standards, and a focus on cutting-edge technologies, Vietnam’s automotive industry is poised to strengthen its global standing while contributing significantly to national economic development.
