The automobile industry in Q1/2023: Potential of the electric cars
Overview of the automobile industry in Q1/2023
Updating the vehicle consumption situation
The business results for the first 3 months of 2023 show that the domestic automobile market has strong growth, but it has not yet recovered to the level of the same period last year.
According to a report by the Vietnam Automobile Manufacturers’ Association (VAMA) on April 13, its members sold a total of 30,038 vehicles last month, including 21,696 passenger cars, 7,990 commercial vehicles, and 352 specialized vehicles. Among them, the sales of passenger cars increased by 28%.
The sales of domestically assembled and imported vehicles were evenly distributed in March. Of these, the number of domestically assembled vehicles sold was 16,174, while the number of imported vehicles sold to Vietnamese customers was 13,864, an increase of 30% and 31%, respectively, compared to February 2023.
The total sales of the entire market reached 30,038 vehicles, a 19% decrease compared to the same period last year but a 30% increase compared to the previous month. This is the second consecutive month of market growth after a stagnant January.
Thus, in the first quarter of 2023, VAMA sold a total of 60,800 vehicles, which is 29% lower than the same period in 2022.
In fact, as we enter April, many car manufacturers continue to offer promotions and strong discounts to attract customers and increase sales. This approach is expected to help maintain growth in the domestic automobile market during the current challenging business period.
Top-selling cars in the automobile industry
In the top-selling cars list for Q1/2023, the first two positions belong to the versatile “national” car model, the Mitsubishi Xpander, and the Hyundai Accent B-class car, with sales of 4,444 and 3,943 units respectively. These are practical and functional car models.
In the list of best-selling cars in Q1, Hyundai has an advantage with the Accent series, while Kia and Toyota have witnessed their most popular models in the high-riding urban Crossover (CUV) segment. Examples are the Sonet and Corolla Cross.
Also on the list, Vinfast ranked 10th with 915 electric cars sold, including the E34, VF8, and VF9 models that have been delivered to customers.
According to industry experts, the list of best-selling cars in Vietnam shows many interesting points. Firstly, the high sales of practical car models demonstrate a shift in the current consumer trend in Vietnam. From fashion and urban-oriented products to practical products with high functionality and more business-oriented operations.
Car manufacturers have caught onto this trend and launched models with modern features and a focus on practicality. Examples include the Hyundai Elantra N and the Honda Civic 2023 version. These models have a higher price tag than other versions, with a strong and sporty design that sets them apart.
Production and import situation of the automobile industry
Vehicle production reaches the top 4 in Southeast Asia
According to a report from the Southeast Asian Automobile Association, the number of cars produced in the region reached 747,152 units in the first two months of this year, an increase of 9.6% compared to the same period last year.
Vietnam ranked fourth in terms of production, but decreased by 34.7% compared to last year, with only 21,583 units produced in the first two months of 2023, behind Malaysia (122,325 cars) and above the Philippines (18,592 cars).
In terms of sales, ASEAN recorded 537,676 cars sold, an increase of 6.9% compared to the same period last year. Vietnam continued to rank modestly, ranking fifth in total sales with 40,354 cars of various types sold in the first two months of the year.
Explaining the market trends in the domestic automobile industry, experts believe that the first two months of the year witnessed the Vietnamese car market being heavily affected by multiple issues, leading to a decrease in both sales and production volume of assembled cars. Meanwhile, the automobile markets of other countries such as Indonesia, Thailand, Malaysia, and the Philippines are currently showing signs of recovery.
A large number of imported cars
The volume of imported cars in the first quarter continued to maintain a high level. Meanwhile, the number of completely built-up imported cars in inventory at domestic dealerships is still quite large, in the context of slow business. According to unofficial figures, there are currently about 38,000 cars of various types in inventory.
However, according to information from the General Customs Department in the early months of the year, the volume of cars imported into the country increased sharply. These are cars that were ordered in late 2022 to race to meet the sufficient supply in the domestic market.
Therefore, this is not a long-term trend but only a current situation. In the coming months, there will be many new car models launched, so the volume of cars imported in the next period may increase.
Regarding the business outlook for the future, many manufacturers are optimistic that the second quarter will see higher growth than the first quarter, as this is usually a period of increasing market demand, partly due to the peak tourism season with high transportation demand. Along with that, many popular car models are expected to have new options and variations, which is considered a move that will stimulate effective consumption.
Great potential from new electric car models
To solve the current situation, many large companies have proactively shifted to electric cars. The Vietnamese auto market will witness the launch of new electric car models, notably luxury cars such as the Mercedes EQS, Audi RS e-tron GT.
This promises to be a product that paves the way for a series of new electric cars, mostly SUVs from major car manufacturers brought in to serve the potential Vietnamese market.
In addition, focusing on the charging station experience and improving infrastructure is essential, aiming toward the goal of gradually replacing gasoline cars in the future. On April 12, Siemens and Vietnamese company EVS signed a strategic cooperation agreement on the deployment of electric car charging infrastructure in Vietnam.
Siemens will bring many intelligent and flexible options to the Vietnamese market, from the small Versicharge AC Smart Wallbox charging device with a capacity of 7.4kW – 22kW, to the SiCharge D fast DC charging devices with high voltage from 160 kW to 300 kW, allowing simultaneous charging of up to 4 electric cars.
In the context of limited charging solutions for electric car users in Vietnam, this is a welcome signal. Currently, the most popular charging system is VinFast’s, with about 150,000 charging ports (according to VinFast representatives on April 12), but it only supports the company’s own cars.
Meanwhile, most luxury brands such as Mercedes-Benz, Porsche… choose to sell small-capacity charging stations as an accessory for customers to install at home.
The Vietnam Automobile Manufacturers Association (VAMA) has also developed 3 scenarios for electrifying cars in Vietnam. Accordingly, the fast scenario is to complete the electrification process by 2025 and achieve 100% electrification by 2035. The medium scenario achieves 100% electrification by 2045. The basic scenario that Indonesia is currently applying is to achieve 100% electrification by 2050.
The above information was updated from the “Automotive Industry Report Q1/2023“. It provides comprehensive information on the macroeconomic situation, trade supply and demand of the industry, related information, and forecasts based on the latest updated data.
VIRAC provides more than 20 economic sectors such as Real Estate, Pulp and Paper, Footwear Leather, Oil and Gas, Textile and Garment, Electricity, Beverage, Pharmaceuticals, Wood, Aviation, Chemicals, Macro Economy, Electronic Components, Logistics, Accommodation, Plastics, Automobile, Coal, Steel, Animal Feed, Food, Construction Materials, Minerals, Telecommunications and Cement…
VIRAC can conduct customized research and reporting to meet the special and in-depth needs of customers. Register for topics HERE.
REGISTER TO RECEIVE DEMO REPORTS ON THE AUTOMOTIVE INDUSTRY
VIRAC was established by a reputable team of personnel with expertise in information, finance, and market research in the region. VIRAC specializes in providing products and services related to:
- Industry Research
- Business Research
- Market Research
- VIRACE data platform
