VIETNAM AUTO MARKET 2025: IMPORT BOOM, PRICE WARS & SUPPLY CHAIN SHIFTS

The Vietnamese automobile industry has undergone significant changes in the first four months of 2025, marked by surging imports, growing domestic assembly, aggressive pricing strategies, and complex global trade relationships.

This article offers a data-driven, comprehensive overview of the key developments shaping Vietnam's auto sector, focusing on import volume, sourcing markets, parts suppliers, and broader trade dynamics—particularly between Vietnam and the United States.

CBU Imports Soar Amid Shifting Market Demands

According to the Vietnam Customs Department, Vietnam imported 64,995 completely built-up (CBU) vehicles in the first four months of 2025, worth approximately USD 1.4 billion. This represents a 48.5% increase in volume and a 50.7% rise in value compared to the same period in 2024.

April alone saw 18,714 units imported, valued at USD 422.9 million, marking a 62% YoY volume increase and a 65.4% increase in value over April 2024. The rise in CBU imports indicates strong domestic demand, particularly in the mid-range and premium vehicle segments where local assembly remains limited.

Leading Import Markets: Thailand, Indonesia, and China Dominate

Vietnam's top three CBU suppliers in early 2025 were:

• Thailand: 24,652 units (37% market share), valued at USD 465.4 million, up 79.4% YoY in volume.
• Indonesia: 21,319 units (36.8%), valued at USD 336.6 million, up 20.2% in volume.
• China: 10,740 units (21.7%), valued at USD 451.2 million, up 59.9% in volume.

Together, these three markets represented over 95% of total imports. Thailand's dominance is primarily driven by ASEAN free trade agreements, favorable logistics, and production specialization in compact SUVs and sedans.

Domestic Assembly Struggles to Keep Pace

According to the Vietnam Automobile Manufacturers’ Association (VAMA), sales of domestically assembled vehicles reached 48,964 units, marking a 13% increase year-on-year. Meanwhile, imported vehicle sales totaled 52,870 units, reflecting a 35% year-on-year rise.

Despite efforts by domestic assemblers such as THACO, VINFAST, and HUYNDAI THANH CONG, consumer preference continues to favor imported models, reflecting concerns about quality, technology gaps, and brand appeal.

Auto Parts Imports Reflect Expanding Industrial Base

Vietnam imported USD 1.702 billion worth of auto parts in the first four months of 2025, marking a 30.9% increase over the same period in 2024. April alone accounted for USD 434 million, representing a 14.5% year-on-year rise.

The main parts suppliers were:

• China: USD 610.9 million (+78.9%)
• South Korea: USD 326.3 million (+11.3%)
• Thailand: USD 237 million (+16.3%)
• Japan: USD 196.7 million (+20.4%)

China’s sharp growth confirms its rising dominance not only in electric vehicle (EV) components but also in traditional combustion vehicle systems.

Vietnam's Top 20 Auto Parts Importers in Q1 2025

The industry remains highly consolidated. The table below lists the top 30 companies by import value:

These companies are not only importers but also major employers, research and development (R&D) investors, and lobbyists for supportive tax regimes.

Payment Methods Reflect Global Trade Channels

Vietnamese auto part importers employ a variety of payment methods:

• T/T (Telegraphic Transfer): USD 778.4 million (China dominant)
• L/C (Letter of Credit): USD 238.4 million (South Korea, China, Japan)
• D/A (Documents Against Acceptance): USD 127.9 million
• TTR (Telegraphic Transfer Reimbursement): USD 37.9 million

This variety suggests a high degree of financial sophistication and integration into global supply chains.

Domestic Policy Context: Taxation, Tariffs, and Incentives

Vietnam’s import tax on CBU vehicles from non-ASEAN countries remains high, ranging from 30–70%, depending on engine size and vehicle type. However, under the ASEAN Trade in Goods Agreement (ATIGA), tariffs on intra-ASEAN CBU imports (e.g., from Thailand and Indonesia) have been reduced to 0%.

Auto parts, on the other hand, generally enjoy lower tariffs, especially for inputs used in manufacturing for export. This aligns with the government’s long-term strategy to transform Vietnam into a regional automotive manufacturing hub.

Vietnam–U.S. Trade Dynamics in the Auto Sector

The U.S. remains a minor source of both CBU vehicles and parts for Vietnam. In the first four months of 2025:

• CBU imports from the U.S. totaled only 153 units (USD 5.8 million)
• Parts imports reached just over USD 10.6 million, down 41.4% YoY

This underperformance reflects both high U.S. manufacturing costs and unfavorable bilateral tariffs. Despite the 2023 Comprehensive Partnership Agreement between the two countries, automotive trade has yet to see significant growth.

Moreover, rising U.S. protectionism and tariffs under the Trump administration’s "America First" policy further complicate bilateral trade. Vietnam faces a complex challenge of maintaining low-cost manufacturing while diversifying markets beyond traditional partners.

Price War in May 2025: Stimulating Domestic Demand

To address slowing demand, many brands launched price promotions in May 2025:

• Honda: 50% registration fee discounts for CR-V, Civic, City
• Toyota: Corolla Cross discount of VND 41–46 million
• Kia: Sonet reduced to VND 500 million
• Ford: Territory discounted by up to VND 70 million
• Volkswagen: Teramont reduced by over VND 500 million

These aggressive strategies highlight increasing competition and thin profit margins, especially as global shipping costs remain volatile.

Outlook for Vietnam’s Auto Industry in 2025 and Beyond

Vietnam’s automobile industry is poised at a crossroads:

• Growth: Strong domestic consumption and rising incomes are expected to support long-term expansion.
• Challenges: Over-reliance on imports, limited EV infrastructure, and policy bottlenecks.
• Opportunities: Regional FTAs, a young population, and emerging EV demand.

Strategic recommendations:

1. Diversify Supply Chains: Reduce dependence on China and expand sourcing from India and Europe.
2. Encourage Domestic R&D: Offer tax breaks for automotive innovation.
3. Negotiate Favorable Bilateral Terms: Especially with the U.S. and EU.
4. Promote EV Ecosystem: Invest in charging infrastructure and battery production.

Conclusion: A Sector in Motion

The first four months of 2025 have shown that Vietnam’s auto industry is expanding—but it is also exposed to vulnerabilities in trade, taxation, and supply chains. With imports rising sharply, local producers struggling to compete, and international relations influencing costs, stakeholders must think strategically.

VANGUARD BUSINESS INFORMATION LLC (VBI) remains committed to providing the most reliable data, risk analysis, and strategic insights for clients navigating Vietnam’s fast-evolving automotive landscape. For business verification, private financial data, and market reports, visit www.vnbis.com.