The automotive industry in Vietnam is a fast-growing sector mainly reliant on domestic sales. All currently produced models are designed abroad by foreign brands, and many rely on

knock-down kit A knock-down kit (also knockdown kit, knocked-down kit, or simply knockdown or KD) is a collection of parts required to assemble a product. The parts are typically manufactured in one country or region, then exported to another country or region ...

production. Due to a high

import taxes A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and polic ...

on automobiles, the Vietnamese government protects domestic manufacturing. Although Vietnam is a member of the

ASEAN Free Trade Area The ASEAN Free Trade Area (AFTA) is a trade bloc agreement by the Association of Southeast Asian Nations supporting local trade and manufacturing in all ASEAN countries, and facilitating economic integration with regional and international alli ...

, automobile imports fall under an exception. Since January 1, 2018, the 30% import tax has been discontinued as part of ASEAN agreements. Currently, the Vietnamese motor industry is not deemed competitive enough to make exports feasible. As of April 2018, 85% of car sales in Vietnam were produced domestically from CKD kits. Before the

Đổi Mới (, ; ) is the name given to the economic reforms initiated in Vietnam in 1986 with the goal of creating a " socialist-oriented market economy". The term itself is a general term with wide use in the Vietnamese language meaning "innovate" or ...

, automobile ownership in Vietnam was very limited and the vehicles present were imported from

Second World The Second World is a term originating during the Cold War for the industrial socialist states that were under the influence of the Soviet Union. In the first two decades following World War II, 19 communist states emerged; all of these were at ...

countries that were more politically aligned with the government. In 1995, the first automobile factories were built, using knock-down kits to produce vehicles, starting with Mitsubishi,

Toyota is a Japanese multinational automotive manufacturer headquartered in Toyota City, Aichi, Japan. It was founded by Kiichiro Toyoda and incorporated on . Toyota is one of the largest automobile manufacturers in the world, producing about 10 ...

and Isuzu. Between 2003 and 2006, the automobile sales tax increased from 5% to 50%, slowing down car sales. The Vietnamese car market is relatively small, but the fastest growing in

Southeast Asia Southeast Asia, also spelled South East Asia and South-East Asia, and also known as Southeastern Asia, South-eastern Asia or SEA, is the geographical south-eastern region of Asia, consisting of the regions that are situated south of mainlan ...

. Most automobile manufacturers in Vietnam are a member of the (non-governmental) Vietnam Automobile Manufacturers' Association (VAMA).

Auto parts

Vietnam has a US$900 million trade surplus in car parts, totaling US$4.4 billion of car part exports. Most of this production is by foreign owned businesses operating in Vietnam. In total the number of parts suppliers was 226 in 2018. In 2018, the share of locally produced parts in the Vietnamese automotive industry was just 10%, compared to up to 80% in

Thailand Thailand ( ), historically known as Siam () and officially the Kingdom of Thailand, is a country in Southeast Asia, located at the centre of the Indochinese Peninsula, spanning , with a population of almost 70 million. The country is b ...

and

Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...

. Due to most advanced parts having to be imported, locally produced vehicles are generally more expensive than foreign built vehicles.

Foreign brands

Chevrolet

GM owned a CKD-kit assembly plant in Hanoi, but the plant was sold to

Vinfast VinFast LLC is a Vietnamese private automotive company headquartered in Vietnam. Established in 2017, it is a member of the conglomerate organization Vingroup, that was founded by Phạm Nhật Vượng. It is the first Vietnamese car brand t ...

in 2018.

Daihatsu

Daihatsu subsidiary Vindaco produced the

Terios The is a mini SUV produced by the Japanese automobile manufacturer Daihatsu since 1997 as the successor to the F300 series Rocky. It was initially offered in both short and long-wheelbase configurations before the former stopped production in ...

from CKDs in Vietnam. The company was dissolved after four years after sales proved too low.

Fiat

Mekong Auto Corporation was founded in 1991.

Ford

Ford Vietnam is a joint venture between

Ford Motor Company Ford Motor Company (commonly known as Ford) is an American multinational automobile manufacturer headquartered in Dearborn, Michigan, United States. It was founded by Henry Ford and incorporated on June 16, 1903. The company sells automobi ...

(75%) and Song Cong Diesel Company (25%), with assembly taking place in Hải Dương province in the north of Vietnam.

Hino

Hino trucks are built in Vietnam in a joint venture with Vinamotor. Hino has been present in Vietnam since 1996.

Honda

Honda Vietnam is a joint venture of

Honda is a Japanese public multinational conglomerate manufacturer of automobiles, motorcycles, and power equipment, headquartered in Minato, Tokyo, Japan. Honda has been the world's largest motorcycle manufacturer since 1959, reaching a producti ...

and the Vietnam Engine and Agricultural Machinery Corporation (VEAM). It is the top selling motorcycle brand in Vietnam, and operates three motorcycle factories and one car factory in Vietnam.

Hyundai

Hyundai models are manufactured from CKD kits by Hyundai Thanh Cong Auto, a joint venture between Hyundai and Vietnam's Thanh Cong Auto. Hyundai reportedly strongly considered building a manufacturing plant in Ninh Binh, to produce the Grand i10 model.

Kia

Since 2008,

Kia Motors Kia Corporation, commonly known as Kia (, ; formerly known as Kyungsung Precision Industry and Kia Motors Corporation), is a South Korean multinational automobile manufacturer headquartered in Seoul, South Korea. It is South Korea's second lar ...

vehicles are produced from CKD kits by THACO Kia, a joint venture with THACO, at a plant in

Chu Lai Chu Lai is a seaport, urban and industrial area in Núi Thành District, Quảng Nam Province, Vietnam. The city is served by Chu Lai International Airport. It is also the site of the Chu Lai Open Economic Zone (Vietnamese: ''Với Khu Kinh T� ...

. Models produced are the Kia New Morning,

Kia Forte The Kia Forte, known as the K3 in South Korea, the Forte K3 or Shuma in China and Cerato in South America, Australia, New Zealand and Russia, is a compact car manufactured by South Korean automaker Kia since mid-2008, replacing the Kia Spectra. ...

Kia Sorento The Kia Sorento ( ko, 기아 쏘렌토, translit=Gia Sorento) is a mid-size crossover SUV (formerly a body-on-frame SUV until 2009) produced since 2002 by South Korean manufacturer Kia. First generation (BL; 2002) 2002–2006 Debuted i ...

Kia Carens The Kia Carens ( ko, 기아 카렌스) is a car manufactured by Kia since 1999, spanning over four generations, and was marketed worldwide under various nameplates, prominently as the Kia Rondo. The initial three generations had a compact MPV ...

Kia Cerato The Kia Cerato (also known as the Kia Forte in North America, K3 in South Korea or the Forte K3 or Shuma in China) is a compact car produced by the South Korean manufacturer Kia since 2003. In 2008, the Cerato nameplate was replaced by the Fort ...

Kia Optima Optima is a humanist sans-serif typeface designed by Hermann Zapf and released by the D. Stempel AG foundry, Frankfurt, West Germany in 1958. Though classified as a sans-serif, Optima has a subtle swelling at the terminals suggesting a glyphic s ...

Mazda

Through its joint venture with THACO, Vina Mazda Automobile Manufacturing,

Mazda 2 , commonly referred to as simply Mazda, is a Japanese multinational automotive manufacturer headquartered in Fuchū, Hiroshima, Japan. In 2015, Mazda produced 1.5 million vehicles for global sales, the majority of which (nearly one m ...

models are produced at a plant in

Nui Thanh NUI as an acronym may refer to: *National University of Ireland *Natural User Interface * Normally unmanned installation Nui may refer to: *Nui (atoll), a group of islands in Tuvalu ** Nui (football club) *Nui, Iran, a village in West Azerbaijan P ...

. The plant has a production capacity of 10,000 vehicles per year and employs 300 workers.

Mitsubishi

Mitsubishi Motors is a Japanese multinational automobile manufacturer headquartered in Minato, Tokyo, Japan.PROTON Holdings Proton Holdings Berhad (PHB; informally Proton) is a Malaysian automotive company and automobile corporation active in automobile design, manufacturing, distribution and sales. Proton was established in 1985 as Malaysia's sole national badged ...

. In 1997 production of Mitsubishi vehicles was started with the

Mitsubishi Delica The is a range of vans and pickup trucks designed and built by the Japanese automaker Mitsubishi Motors since 1968. It was originally based on a cabover van and pickup truck introduced the previous year, also called the Delica, its name a cont ...

van, with other vehicles being the

Mitsubishi Pajero The Further information on the Mitsubishi P ...

and

Mitsubishi Canter The is a line of light-duty commercial vehicles manufactured by Mitsubishi Fuso Truck and Bus Corporation, part of Daimler Truck, subsidiary of Mercedes-Benz Group. The Canter is manufactured since 1963, now in its eighth generation. The Canter ...

SsangYong

Suzuki

Suzuki builds cars in Vietnam through its Visuco subsidiary, operating in a factory in

Bien Hoa Bien may refer to: * Bien (newspaper) * Basic Income Earth Network * Bień, Poland {{disambiguation ...

, Dong Nai Province. The factory produces the Super Carry, Ertiga, Grand Vitara, Vitara and

Swift Swift or SWIFT most commonly refers to: * SWIFT, an international organization facilitating transactions between banks ** SWIFT code * Swift (programming language) * Swift (bird), a family of birds It may also refer to: Organizations * SWIFT, ...

, as well as the Impulse 125 Fi, Hayate 125, UA125-T, Viva 115 Fi, Raider 150 and Axelo 125 motorbikes. Annual production is 6000 motor vehicles and 100,000 motorbikes.

Toyota

Toyota Motor Vietnam uses CKD kits to produce vehicles for the domestic market. Vehicles produced are the Vios, Fortuner and Innova. It produced 41,000 vehicles in 2017.

Mercedes-Benz

Daimler AG The Mercedes-Benz Group AG (previously named Daimler-Benz, DaimlerChrysler and Daimler) is a German multinational automotive corporation headquartered in Stuttgart, Baden-Württemberg, Germany. It is one of the world's leading car manufactu ...

assembles various

Mercedes-Benz Mercedes-Benz (), commonly referred to as Mercedes and sometimes as Benz, is a German luxury and commercial vehicle automotive brand established in 1926. Mercedes-Benz AG (a Mercedes-Benz Group subsidiary established in 2019) is headquartere ...

models from CKD kits at its factory in Ho Chi Minh City. The first car assembled by Mercedes-Benz Vietnam was an E-Class in 1996. The factory is a joint venture with

Sai Gon Mechanical Engineering Corporation Samco (''Sai Gon Mechanical Engineering Corporation'', Vietnamese: ') is a Vietnam Vietnam or Viet Nam ( vi, Việt Nam, ), officially the Socialist Republic of Vietnam,., group="n" is a country in Southeast Asia, at the eastern edge of ...

. In 2017, the factory built 6,000 vehicles.

Peugeot

Peugeot Peugeot (, , ) is a French brand of automobiles owned by Stellantis. The family business that preceded the current Peugeot companies was founded in 1810, with a steel foundry that soon started making hand tools and kitchen equipment, and the ...

opened a factory in 2019 at Quang Nam province to produce the

Peugeot 3008 The Peugeot 3008 is a compact crossover SUV manufactured and marketed by Peugeot. It was first presented to the public in Dubrovnik, Croatia in 2008, and then again in 2010 at the Mondial de l'Automobile in Paris, by the French manufacturer Peuge ...

and

Peugeot 5008 The Peugeot 5008 is a series of automobiles produced by the French manufacturer Peugeot since 2009. Originally compact MPV in classification, for model year 2017 it was reclassified as a compact crossover SUV. Five- and seven-seat versions have b ...

for domestic market through joint venture with THACO. Since 2020, the

Peugeot 2008 The Peugeot 2008 is a subcompact crossover SUV (B-segment) produced by the French automaker Peugeot. Unveiled at the 2013 Geneva Motor Show and positioned below the 3008, the first 2008 replaced the Peugeot 207 SW, as Peugeot did not release an ...

is also assembled locally at THACO Chu Lai plant.

Licensed production

SAMCO produces Hyundai buses under licence.

Domestic brands

VinFast

VinFast is the only domestic passenger vehicle brand in Vietnam. In August 2018, General Motors sold its Vietnamese operations to VinFast, granting the latter distribution rights of GM models in Vietnam, and transferring its Hanoi plant to VinFast. VinFast will use the plant to produce its own developed vehicles, in addition to the already planned plant in Haiphong. The CEO of VinFast is former GM executive Jim DeLuca. VinFast also produce

ICE Ice is water frozen into a solid state, typically forming at or below temperatures of 0 degrees Celsius or Depending on the presence of impurities such as particles of soil or bubbles of air, it can appear transparent or a more or less opaqu ...

cars, electric cars and electric scooters.

Former domestic brands

Vinaxuki

Vinaxuki produced light commercial vehicles. There were also plans for a small car which would have been Vietnam's first domestically developed passenger car, but the company went bankrupt and ceased operations in 2015. All efforts to revive the company and restart production have so far been unsuccessful.

La Dalat

La Dalat was a Citroen 2CV based car designed by French Citroen engineers based in Vietnam. 5,000 vehicles were produced between 1969 and 1975, making it the first car produced in Vietnam.

Sales

In 2017, Toyota held the highest market share among passenger vehicle sales in Vietnam, at 23%. Since 2013, the

Toyota Vios The Toyota Vios is a nameplate used for subcompact cars produced by the Japanese manufacturer Toyota, primarily for markets in Southeast Asia, China and Taiwan since 2002. Slotted below the compact Corolla, the Vios serves as the replacement t ...

is the bestselling car in Vietnam, followed by the

Hyundai Accent The Hyundai Accent ( ko, 현대 엑센트), or Hyundai Verna (현대 베르나) is a subcompact car produced by Hyundai. In Australia, the first generation models carried over the Hyundai Excel name used by the Accent's predecessor. The Accen ...

and Hyundai Grand i10. Data from VAMA members only.

References

External links

* {{Automotive industry Industry in Vietnam