Import Tax Reduction and Free Trade Agreements
In order to support the growth of automotive industry in motorcycle dominated Vietnam, the government, post 2018, has implemented policies and regulations for the reduction of new car prices. Import tax reduction to 0% for automotive parts and components from ASEAN region to free trade agreements signed with European Union extensively supports the sales of new passenger vehicles from foreign brands, acting as a deterrent to the used car industry. Coupled with that, the reduction of vehicle registration fees by 50% for domestically assembled and produced vehicles has contributed to the development of the domestic automotive manufacturing industry such as Vinfast negatively impacting the used car ecosystem.
Lack of Supporting Industries
Vietnam suffers from a poor localization rate due to underdevelopment of the supporting industries. For cars, the localization rate stood at a meagre 7-10% as of 2021, which is considerably lower than the fellow ASEAN countries of Thailand and Malaysia. As of 2021, there are currently ~100 Tier 1 Suppliers and less than 150 Tier 2 and Tier 3 spare parts supplier in Vietnam, which is considerably low considering 30,000 spare parts are required on an average to build a passenger vehicle. The lack of development of the supporting industries especially spare parts market, acts as a deterrent for repair services of used cars as it increases customer waiting time.
Competitive Landscape in Vietnam Used Car Market
Vietnam’s used car market is highly fragmented with presence of large number of organized and unorganized multi brand dealers. Integration of online classified platforms such as Carmudi and Bonbanh in recent years along with the presence of captive dealers restricts the dominance of single player in the market. A notable shift in consumer preference post COVID-19 has contributed in the emergence of online ecosystem. Dealership networks which depends on the sales through their retail network is establishing their online presence in order to gain traction across Vietnam. Therefore, one of the important areas of competition would be the online visibility of players in coming years. Captive, multi brand and classified players compete on the basis of services offered such as vehicle inspection & valuation, financing & warranty facilities and quality checks among others.
Impact of COVID-19 on Used Car Industry
Even though the used car industry post 2018 has witnessed a decline in sales volume, but the advent of COVID-19 is contributing towards the positive outlook of the industry. Increased awareness on health and hygiene is acting as a catalyst for the shift in consumer’s preference from availing public transportation to private transportation medium. The shift in consumer’s preference is expected to contribute in the growth of passenger vehicle sales in coming years. Coupled with that, government initiatives to ban motorbikes by 2030 and development of road infrastructure facility is contributing in the shift towards consumer adapting to passenger vehicles compared to historically prevalent motorbikes.
The publication titled ‘Vietnam Used Car Market Outlook to 2026: Driven by growing disposable income and shifting consumer preference from two-wheelers to four-wheelers” covers the overview of used car industry by analyzing historical statistics and corresponding developments in the used car market. Reduction of import tax to 0% for cars imported from ASEAN region, free trade agreements signed with European Union and support to the domestic automotive industry have subsequently deterring the growth of used car market post 2018. However, initiatives such as ban on motorbikes, fast growing middle class population and affordability of used vehicles is expected to contribute to the surging growth of the industry in coming years. Given the fragmented completion structure in the used car market, analysts have elaborated on competitive landscape of major captive dealers, multiband dealers and classified platforms on the basis of services offered and operational parameters. The report also covers a snapshot on online and offline used car business model, value chain analysis, growth drivers, buying decision parameters, business model, SWOT analysis, impact of COVID-19 and risk factors governing the future outlook of industry. The report also provides comprehensive insight on the market size and segmentation of the industry. Further, the report covers overview of the supporting industries such as auto-finance, aftersales and spare parts industry on the basis of market size. The report highlights the pain points of the auto-finance market along with detailed company profiles of major banking institutions and NBFCs. The report concludes with projections for future industry market size, market segmentations and analyst take on future market scenario.
Key Segments Covered in Vietnam Used Car Industry:-
Vietnam Used Car Market
By Type of Vehicle
Sedans
SUVs
MPVs
Hatchbacks
Others
By Vehicle Age
0-3 years
3-5 years
5-7 ears
More than 7 years
By Region
Northern
Central
Southern
By Price
VND 0-200 Million
VND 200-400 Million
VND 400-600 Million
More than VND 800 Million
By Mileage
0-30,000 Km
30,000-60,000 Km
60,000-80,000 Km
More than 80,000 Km
By Vehicle Brand
Toyota
Ford
Kia
Honda
Hyundai
Others
By Supply Type
Domestic
Imported
By Mode of Sales
Online
Offline
By Channel Purchase
Organized Purchase
Non-Organized Purchase
By Financed vs Non-Financed
By Financing Type
Organized Financing
Unorganized Financing
Vietnam Auto-Finance Market and Auto Insurance Market
Total Car Loans Disbursed
Total Outstanding Loans
Auto-Insurance Market on the basis of Gross Premium
Key Target Audience
Captive Dealers
Multibrand Dealers
Classified Players
Banks, and NBFCs providing Financing Facilities
Automotive Companies
Government Bodies
Time Period Captured in the Report:-
Historical Period: 2015-2021
Forecast Period: 2021-2026F
Vietnam Used Car and Auto-Finance Players
Major Captive Dealers
Thanh Xuan Ford
Mercedes Benz An Du
Hyundai Dong Do
Toyota An Suong
Hien Toyota
Major Multi Brand Dealers
Anycar
Viet Han Used Car
Hoa Binh Auto
Viettin Auto
Major Classified Players
Oto
Bonbanh
Carmudi
Chotot
Choxe
Major Banks providing Auto-Financing Facilities
VIB Bank
TP Bank
VP Bank
Standard Chartered
Vietin Bank
Techom Bank
Woori Bank
Shinhan Bank
Major NBFCs and Captive Companies providing Auto-Financing Facilities
Mirae Asset
Toyota Financial Service
BMW Financial Service
Key Topics Covered in the Report:-
Overview of Vietnam Used Car Market
Ecosystem of Vietnam Used Car Industry
Vietnam Used Car Online and Offline Business Model
Market Size of Vietnam Used Car Industry (Gross Transaction Value and Sales Volume)
Market Size of Vietnam Used Car Industry on the basis of B2C, C2B and C2C Sales Channel
Vietnam Used Car Industry segmentation (By Type of Vehicle, By Vehicle Age, By Region, By Price, By Mileage, By Vehicle Brand, By Supply Type, By Mode of Sales, By Channel Purchase, By Financed vs Non-Financed and By Financing Type)
Cross Comparison of Major Dealers and Classified Players (Vehicle Inspection, Valuation of Car, Car Finance Service, Aftersales Service, Car Warranty Service, Certification, Customer Consulting Service, Workshops, Financing and Warranty Facilities)
Company Profile of Captive Dealers, Multi Brand Dealers and Classified Players (Company Profile, Process of Selling Used Cars, Major Services, USP, Financing Facilities, Popular Car Brands, Total Number of Used Car Listings, and Business Model)
Growth Drivers and Challenges to Vietnam Used Car Market
Industry trends and developments
Rules and Regulations by Government Bodies
Impact of COVID-19 and Future Outlook of Industry
Porter 5 Forces Analysis of Vietnam Used Car Industry
SWOT Analysis of Vietnam Used Car Industry
Buying Decision Parameters of Consumer’s
Overview of Auto-Finance and Auto-Insurance Market in Vietnam
Market Size of Auto-Finance and Auto-Insurance Market (Total Credits Disbursed, Total Outstanding Loans)
Company Profile of Banking Institutions, NBFCs and Captive Auto-Financing Companies (Company Overview, Products, USP, Business Strategy, Loan Amount, Payment Methods, and Interest Rate Charged)
Overview of Aftermarket Services Industry in Vietnam
Overview of Spare Parts Industry in Vietnam
Analyst Recommendation
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