With the sales volume of 2022 possibly reaching the threshold of 500,000 units, the Vietnamese auto market will be removed from the “small market” label and move to another stage of development, promising a boom not far away.

Assembling cars at Ford Vietnam’s factory in Hai Duong province. Photo: Duc Thanh

Going beyond “small market”

In Vietnam, the sales activities of automobile enterprises in the first 11 months of 2022 achieved impressive results. Statistics from the Vietnam Automobile Manufacturers Association (VAMA) show that in 11 months, the Vietnamese auto market has sold 369,334 vehicles, up 43% over the same period in 2021, including tourist cars increased by 63%; commercial vehicles increased by 0.3% and specialized vehicles decreased by 9% compared to 2021.

It is worth mentioning that the sales announced by VAMA do not include 72,037 Hyundai cars sold or the number of more than 20,000 cars of VinFast and there is no data from Mercedes-Benz Vietnam. Thus, it is certain that the Vietnamese auto market will reach the milestone of 500,000 vehicles in 2022.

Previously, the industry’s sales only stopped at around 400,000 vehicles per year (in 2019 it reached 409,412 vehicles, in 2020 it was 407,655 vehicles, in 2021 it sold 409,844 vehicles). In January 2022, Mr. Pham Van Dung, then General Director of Ford Vietnam, commented on the possibility that car sales in 2022 will reach a fast growth rate, after being “compressed” in the year. 2020-2021.

Thus, when the sales of 500,000 vehicles per year are achieved, the Vietnamese auto market is no longer small, it will almost double the Philippines market and the gap with Thailand will also be narrower.

More broadly, experts say that, with a country where GDP per capita begins to exceed the threshold of $3,000 per year like Vietnam today, the process of automating begins to take place strongly.

Which clean car will take the throne?

In 2022, the automobile market received about 50 new cars or upgraded versions with all segments. Notably, many first introduced hybrid and pure electric cars to Vietnam have created opportunities for consumers to access the world trend.

According to experts, the main barrier to the pure electric cars (EVs) development in Vietnam is dues to infrastructure. Currently, only VinFast has a strongly developed infrastructure for electric vehicles. But it’s hard to say whether others could use VinFast’s charging station.

Sharing this fact, Mr. Nguyen Minh Dong, an automotive expert, said that to develop electric vehicles, the Government and the manufacturing enterprise must accompany and cooperate to build a charging station. “How many distances are you traveling a distance of more than 300 km? People cannot buy many cars to use for many different journeys ”, the expert said.

On the other hand, the balance of electricity needs for electric car infrastructure is also a question that has not had a clear solution because there is no planning for the charging station, or sources, as well as the demand for capacity to avoid waste when investing up to now. Currently, the charging station investment is all self-implemented with no cooperation between businesses to save social investment on the overall level.

Besides, the power source to maintain the current electricity system of Vietnam is mainly coal thermal power – which is thought to be not clean compared to renewable energy, so the whole chain from electricity production to electric vehicles has not achieved green goals as expected.

Facing the current situation of electricity infrastructure that has not been able to improve quickly in the next five years, the development of hybrid cars is considered a more appropriate escape for the Vietnamese market. With the fuel consumption of about 40-50% decreasing compared to the usual internal combustion engine, hybrid cars will contribute significantly to emission reduction due to less fossil fuel consumption.

There are currently two types of hybrid cars in the Vietnam market, pure hybrids using petrol engines and plug-in hybrids (Phev) using electricity parallel running on battery and petrol/oil to provide energy for vehicles to operate. Even if the Hybrid Plug-in (Phev) has greater benefits while it is in use since the driver may actively charge the battery without using the engine (the braking process of energy regeneration), the price is around 20% more than the normal hybrid.

Consumers may, though, hold out hope that Thaco’s Hybrid Market market will soon be able to open a stage that will be advantageous to both customers and Vietnam’s emission reduction process. That’s because, in the past, people have witnessed the participation of Thaco and the brands provided by it in all segments, the market has created vibrant competition, and consumers benefited the most when the price of the car has become more “comfortable”.

Source: Bao Moi