How Vietnam Used Car Market is Positioned?
Vietnam’s automobile is still an infant industry, with used car market being in early growth stage.
Due to underdeveloped infrastructure and high taxes and fees levied on the cars, people in Vietnam prefer to buy a used motor vehicle as there is a high rate of depreciation. For middle or lower income group people, used cars have become more popular choices since the ban on motorbikes were announced in 2017.
Owing to relatively high production costs due to high fees on imported parts as well as lack of economies of scale, the vehicle ownership level is much lower in Vietnam as compared to various developed economies such as Thailand and Indonesia. The used car market of Vietnam is highly fragmented with presence of more than ~ dealership outlets.
The growth in Vietnam Used Car Market is primarily driven by the growing middle class population, faster car replacement rate and increasing number of government initiatives with respect to free trade agreements and reduction in taxes and import tariffs.
The Gross Transaction Value (GTV) from sale of used cars in Vietnam has increased from USD ~ in 2013 to USD ~ in 2018 at a CAGR of ~% during the period 2013-2018. Vietnam used car market in terms of sales volume has increased from sale of ~ units in the year 2013 to the sale of ~ units during the year 2018 largely due to faster replacement period of cars in the market. The increase in number of inspection checks and direct connectivity with the buyer and seller has led to significant growth in sale of used cars in the country.
How Vietnam Used Car market Segmented?
By Type of Vehicle
Sedans accounted for the highest market share in terms of sales volume in the used car market of Vietnam by capturing ~% in the year 2018. Sedans have high average car life and are conferred as a higher social status. Sedans are followed by SUVs in 2018 capturing ~% of total sales in Vietnam used car sales. SUVs have off late become more popular in Vietnam on account of most of the major companies launching stylish and affordable models. MPV’s were the third most preferable vehicle category with ~% market share in terms of sales volume followed by Hatchbacks, CTV’s and other vehicle types such as Micro vans capturing the remaining share.
By Vehicle Age
Used cars under the age bracket of 2-4years dominated the market share contributing ~% share during the year 2018. The average ownership period in Vietnam is ~ years due to which the age bracket accounted for the highest share.
Sale of used vehicles within the age bracket of 4-6 years accounted for ~% share during the year 2018 and cars within the age bracket of 0-2 years accounted for a minimum share of ~% as it usually consists of hatchbacks. Cars sold under the age bracket of more than 6 years declined from ~% in 2013 to ~% in 2018 due to faster replacement period of cars which has improved from ~ years in 2013 to ~ years in 2018.
The northern region accounted the highest percentage share in terms of sales volume of ~% during the year 2018 as these regions are prone to flood due to which the average replacement period is higher. It was followed by southern region accounting for ~% of sales volume. This region has the highest middle class population who prefer to buy an affordable used car thus boosting the sale of used car in the region. The remaining share was captured by the Central region where majority of the car rental companies operating in Vietnam are purchasing and renting out used cars.
Hanoi and Ho Chi Minh City accounted for the highest share of ~% and ~% respectively in terms of sales volume in the year 2018. The high market share was largely due to high population, developed infrastructure and faster replacement period. Hai Phong and Da Nang along with other cities contributed the remaining share in total sales value of used cars in the country owing to the rising infrastructural development and building up of new residential hubs in the region.
By Price Range
Cars under the price range of VND 400 Million – VND 600 Million accounted the highest sales volume of ~% of the market share among all the price ranges. This is largely due to the affordability of middle class population that prefers buying a used vehicle over a new vehicle. The price range of Less than VND 200 Million captured ~% of the market share and mainly comprises of Hatchbacks, MPVs and Sedans which are generally replaced after 6 years largely due to incapability of purchasing new car at shorter period. It was followed by cars under the age bracket of VND 600 Million – VND 800 Million capturing market share of ~% in the year 2018. The price range of VND 800 Million – VND 1 billion comprises of the luxury cars such as Mercedes Benz and Audi captured the remaining market share of ~% of total sales volume in the year 2018.
Japanese and Korean brands are the most preferred brands in Vietnam due to strong brand preference, reliability, longer life span, and higher re-sale value of the used car. Toyota dominated the market capturing market share of ~% followed by Ford, KIA, Mazda and Honda capturing market share of ~%, ~%, ~% and ~% respectively in terms of sales volume in 2018. The major reasons include the stylish models preferred by the millennial, assurance of car quality, high resale value, convenience in maintenance and services provided and certifications being given by the captive dealer showrooms of these brands. Other brands such as Mitsubishi, Chevrolet and others captured the remaining market share of used cars sales volume in 2018.
Key Segments Covered:-
By Type of Vehicle
Cross Type Vehicles (CTVs)
By Vehicle Age
More than 6 Years
Less Than VND 200 Million
VND 200 Million – VND 400 Million
VND 400 Million – VND 600 Million
VND 600 Million – VND 800 Million
More Than VND 800 Million
Key Target Audience:-
Multi Brand Dealers
Venture Capitalist Firms
Government/ Regulatory Authorities
Time Period Captured in the Report:-
Historical Period: 2013-2018
Forecast Period: 2019E-2025E
Major Online Players in Vietnam:-
Major Captive Dealers:-
Than Xuan Ford
Mercedes Benz An Du
Hyundai Dong Do
Toyota An Suong
Viet Han Used Car
Hoa Binh Auto
For more information, refer to below link:-
China Used Vehicle Market Outlook to 2022 – by Type of Vehicle (Sedans, SUVs, Micro Vans, MPVs, Trucks, Buses, Cross Type Vehicles, Trailers, Motor Cycles and Low Speed Trucks), by Vehicle Age, by Distribution Channels, by Region, by Price of Vehicle
Ankur Gupta, Head Marketing & Communications