6 highlights of auto industry in 2022

Highest ever sales

For the first time annual sales are set to reach 500,000 units after 459,423 were sold in the first 11 months.

This has propelled Vietnam into the top four new car markets in Southeast Asia along with Malaysia, Thailand and Indonesia.

It is the second highest growth market in the region. According to the ASEAN Automotive Federation, in the first 11 months the Vietnamese auto market grew at 43.5%, behind only Malaysia (44.8%).

The growing market size and rapid growth in demand are important factors that have attracted auto manufacturers to Vietnam.

Higher prices as supply falls

Imports and local production were not enough to meet the demand in the first half of 2022 as an interruption in the supply of auto components drove down production. It pushed up costs while transportation also became more expensive due to the Covid pandemic.

Things gradually improved and the shortage ended in the second half of the third quarter.

During the difficult phase Toyota, Hyundai, Mitsubishi, Kia, and other carmakers took one to two months to deliver their best-selling models to customers. It took imported cars, especially luxury vehicles, four months, and even half a year in some cases, to be delivered.

The prices of many cars increased by dozens to hundreds of millions of dong (VND24,000=$1) due the fall in supply.

Manufacturers also hiked prices for reasons like making upgrades to engines to meet Euro 5 emission standards.

The price hikes occurred virtually across the board with Ford, Toyota, Kia, Hyundai, Mitsubishi, Suzuki, Lexus, Mercedes and other increasing the prices of both locally made and imported vehicles. Kia hiked prices four times.

New models enter, some old ones bid good bye

The auto market sees new models enter and old ones discontinued every year, and 2022 was no different albeit the numbers were a bit bigger than usual.

Auto companies normally discontinue models based on their product strategy but this year there was another reason too: the mandatory Euro 5 emission standard requirements for new autos sold from 2022.

The vehicles discontinued based on emission standards included Toyota’s Wigo and Hilux and Honda’s Brio.

Hyundai’s Kona, Toyota’s Rush, Volkswagen’s Passat and Polo hatchback were pulled out of the market due to lack of demand.

As for VinFast, its strategy of shifting lock, stock and barrel to EVs from 2023 caused it to stop production of its entire range of gasoline cars, including Fadil, Lux A.20 and SA 2.0.

On the other hand, a number of new cars were introduced in the market. Hyundai introduced Creta after pulling the plug on Kona. Toyota stopped selling Rush, replaced it with Veloz and added Raize, a small SUV for young urban customers.

Kia brought back the Sportage and Carens after a gap of many years. Hyundai brought its Stargazer in the MPV segment while Ford replaced the Escape with the Territory in the C segment.

Jeep sold its large SUV, the Grand Cherokee, for the first time, while Volkswagen had the T-Cross in the subcompact crossover SUV segment.

EV growing trend

The EV trend has yet to catch on on a large scale but came into view clearly in 2022 with two main groups: hybrid vehicles and pure EVs.

Seeing the limited numbers of charging stations in Vietnam, Japanese and Korean firms considered hybrid to be the most suitable configuration and decided not to hurriedly invest in pure EVs.

Toyota was the first to sell hybrid models — the Corolla Cross, Camry and Altis — followed by Suzuki with Ertiga.

Nissan entered the hybrid car market with Kicks, Kia launched the Sorento, the first hybrid in Vietnam. Kia planned to sell the EV6, a pure EV, in 2022, but the plan did not materialize.

Volvo announced the hybrid engine would be the default configuration in all of its products from 2023. Bentley in 2022 brought the externally charged Flying Spur to Vietnam for the first time.

Lexus continued to sell hybrid cars alongside its gasoline engine options.

Mercedes and Audi brought the EQS and e-tron GT, the most expensive pure EVs.

VinFast cars exported to the U.S.

VinFast, Vietnam’s first indigenous carmaker, became the first auto firm in the country to export vehicles to the U.S.

The first batch of 999 VF 8 EVs left the northern port of Hai Phong on Nov. 25 and arrived in California in the U.S. on Dec. 19.

VF 8 car bound for the U.S. on Nov. 25, 2022. Photo courtesy of VinFast

According to experts, the first batch of exports to the U.S. may not be an indicator of VinFast’s long-term success in that major auto market, but is an important step for the company and Vietnam’s automobile industry in general.

VinFast has stopped manufacturing gasoline cars, and started delivering VF 8s this year. The VF 9 and VF 5 will follow in 2023, and the VF 6 and VF 7 in the following years.

Registration most difficult

In late 2022 people found registration of new and used vehicles extremely difficult.

After the HCMC police investigated violations at many southern registration centers and arrested their directors, they had to cease operations while that of the remaining centers has been tightened.

Vehicle registration at a center in HCMC’s Binh Thanh District. Photo by VnExpress/Thanh Nhan

Auto dealers have to delay delivery of cars to customers because their registration takes more time than before.

Registration centers in HCMC and Hanoi have become overcrowded, with some auto owners having to wait a full day for their turn.

The Vietnam Register has urged registration centers to resolve the problem soon, especially with Tet, the Lunar New Year, approaching.