Bumpy ride for auto industry in 2023

Almost all brands, both popular and high-end, domestic and foreign, offered discounts to spur the weak demand.

The discounts were offered so often that the communications manager of a German car distributor in Vietnam said just thinking about giving a name to the promotion became difficult.

Truong Hai lowered the price of the Mazda CX-5 below the VND800 million (US$33,300) threshold, the segment’s floor price, putting pressure even on cars in lower segments.

Hyundai Thanh Cong followed suit by slashing the prices of the Tucson and Santa Fe by hundreds of millions of dong.

New car prices regularly decreased by tens to hundreds of millions of dong, and so used-car businesses were cautious about buying vehicles.

In the first 11 months of the year 319,855 new vehicles were sold, a 28% decline from the same period last year.

The 500,000-vehicle mark attained in 2022 is now out of reach.

Chinese car wave

There has never been a year when so many Chinese car manufacturers were present or announced business and investment plans in Vietnam. Wuling, Haval, Lynk & Co, and Haima appeared one after another, selling both assembled and imported vehicles.

The Wuling Hongguang Mini EV at the TMT factory complex in the northern Hung Yen province in May 2023. Photo by Tuan Nguyen

Chinese cars are present in virtually all segments: Wuling sells its Hongguang Mini EV for less than VND300 million, and Lynk & Co’s 09 costs nearly VND2.2 billion.

Chery and its subsidiaries, Omoda and Jaecoo are expected to arrive in 2024 as is BYD.

A spokesperson for a HCMC company that distributes both distributing both budget-friendly and luxury car brands, said it is negotiating to sell another Chinese car brand that makes both gasoline and pure electric vehicles.

Chery and BYD have said they want to build factories in Vietnam to serve both the local and export markets.

Series of quality problems

There were dozens of recalls involving tens of thousands of vehicles needing to be inspected and repaired.

Toyota mainly encountered problems with faulty airbags and seat belts, causing it to recall vehicles such as Vios, Raize and Veloz.

Ford’s Everest and Explorer had engine control and exhaust handling software acting up.

Many Mercedes models such as GLC, C-class, E-class, and S-class had problems with the fuel pump and air conditioning.

There were also recalls by brands such as Isuzu, VinFast, Jeep, Hyundai, Audi, Porsche, and Bentley. Daihatsu, a Toyota subsidiary, was caught cheating on safety and emissions testing.

Many Toyotas cars sold in Vietnam such as Raize, Avanza, Veloz, and Yaris Cross use the DNGA platform developed by Daihatsu.

Green car trend clearer

Dozens of new cars were launched in 2023, both by foreign carmakers from China, Japan, South Korea, and other countries and domestic ones such as VinFast.

They included Toyota Yaris Cross, Innova Cross, Hyundai Custin, Palisade, Honda BR-V and CR-V, and VinFast VF 6 and VF 7.

In the luxury segment, BMW and Mercedes introduced the most new models.

The green car trend, including electric models, gradually became clear in 2023 despite only accounting for a small proportion of sales.

VinFast is pursuing the most drastic pure-electric strategy and has the largest range of offerings with the VF 5, 6, 7, and 9.

Hyundai launched the Ioniq 5, Wuling the Hongguang Mini EV and Haima the 7XE.

In the luxury segment, BMW and Mercedes introduced many new pure electric models such as i4, i7, iX3, EQE, QEB, and EQS.

Toyota, Honda and Hyundai launched hybrid vehicles.