Overview of Vietnam Used Car Industry and Market Size
The report “Vietnam
Used Car Market Outlook to 2026: Driven by growing disposable income and
shifting consumer preference from two-wheelers to four-wheelers” was
valued at USD ~XX billion in 2021, contracting at a CAGR of XX% in between 2015
and 2021 on the basis of gross transaction value. The decline in GTV as well as
sales volume of used car industry is attributed to various government
initiatives to support the growth of domestic automotive industry, and policies
implemented such as reduction in import tax to 0% for cars imported from ASEAN
region. These factors contributed in the reduction of new car prices post 2018,
negatively impacting the used car market.
Historically, motor bikes have
always remained the top choice among the consumers due to high concentration of
population belonging to rural regions having low purchasing power. However, due
to rapid urbanization and fast growing middle class, the demand for passenger
cars has been growing significantly in recent times which in turn is
contributing to the growth of automotive industry. Passenger vehicle sales
expanded with a CAGR of XX% in between 2015-2021.
However, increased awareness on
health and hygiene followed by the advent of COVID-19 is acting as a catalyst
for the shift in consumer’s preference towards availing private transportation
medium compared to public transportation. Coupled with that, financial
constraints of consumers will enhance the Growth of Vietnam Used Car Market in
coming years as fast growing middle class population in Vietnam prefers lower
priced used vehicle as compared to expensive newer vehicles.
The average ticket size remained
at a band of USD XX-XX in between 2015 and 2021. Leveraging the growing
internet penetration rate, various online classified players launched their
operation in Vietnam post 2013, such as Oto and Carmudi. The increasing
preference of consumers towards availing digital medium for their purchases has
enhanced the sales prospect via C2C channel through classified platforms. As of
2021, used car sales via C2C channel through both peer and classified platforms
expanded with a CAGR of XX%.
Vietnam
Used Car Market Future Outlook, 2021
By Type of Vehicle: Sedans accounted for the highest market share of
XX% in the year 2021. Sedans remained the most popular car type in the country
due to its affordable price and higher average life as compared to Hatchback
and MPVs. SUV’s accounted the second highest market share followed by
Hatchbacks, and MPVs.
By Region: The northern
regions accounted for the highest share of XX% in 2021, as this region is prone
to floods due to which the average replacement period is usually high and
consumers prefer to buy a used car as compared to new cars for ease of
replacement. It was followed by the Southern region with the highest population
and the remaining market share was captured by the Central region.
By Vehicle
Age: Used cars under the age bracket of 0-3 years
accounted for highest market share of XX% in 2021 attributed to the average
depreciation rate of new vehicles in Vietnam which is around 3 years due to
poor road condition which leads to wear and tear. The sale of used cars is
followed by 3-5 years of vehicle age as these cars have heavy body type,
better engine capacity (high horse power) and have high re-sale value.
By Mileage: Vehicles not driven for more than 30,000 Km are
most preferred in Vietnam, capturing a share of XX% out of overall sales in
2021. Consumer’s purchasing a used vehicle prefers car which has not been used
extensively, as the quality of vehicles might drastically fall with the
increase in usage.
By Price: The average
ticket size of used cars in Vietnam is growing over the years. The price range
of VND 400 Million – VND 600 Million accounted for highest percentage share of
XX% in 2021 due the faster replacement rate along with the depreciation charged
over the years on new vehicles. The average resale price at which Sedan’s and
SUV’s are sold in Vietnam lies within the price band of VND 400-600 million,
which are the top two preferred car types by Vietnamese consumers.
By Vehicle
Brand: Toyota dominated the market by
accounting highest market share of XX% in 2021 followed by KIA, Hyundai, Ford
and Honda in terms of sales volume. Other brands such as Mitsubishi and
Chevrolet captured the remaining market share of used cars sales volume in
2021.
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By Supply Type: Domestic supply accounted for the highest share of XX% on the basis of
sales volume in 2021. Imported supply of used vehicles is financially taxing to
the consumers due to various taxes and levy’s charged.
By Mode of
Sales: Sale of used cars through
offline medium was the preferred choice of consumers which contributed to XX%
of the overall sales in 2021 compared to online medium. Low internet
penetration rate (~XX% in 2021) in Vietnam is a major reason for the lack of
sales through online medium.
By Channel of Purchase: XX% of the user car purchases in Vietnam was
through unorganized channel on the basis of sales volume in 2021 which
accounted for the highest share. Presence of large number of unorganized multi
brand dealers spread across the rural regions of Vietnam contributed to the
majority share of unorganized purchases.
Overview of
Vietnam Auto-FInance and Auto-Insurance Market
Banking institutions, NBFCs and
captive companies are the major entities offering financing facilities to
customers willing to purchase used car. Banking institutions dominate the
market when it comes to credit disbursal capturing a share of XX% in 2021. The
leading banks for the used-car segment are VP Bank, TP Bank, VIB and Techcom
Bank. It is estimated as of 2021 that the current split of people taking a loan
to finance their used car purchase v/s those who pay from their own pocket
would be about XX% to XX%. Banks like Shinhan Bank and VIB are preferred by the
people in general, for their lower interest-rate loans. Vietnam Auto-finance
market is expected to be valued at USD XX billion in 2025, expanding at a CAGR
of 17.6% in between 2021 and 2025 on the basis of total credit loans disbursed.
Growth in auto-insurance market is also expected which is estimated to be
valued at USD XX Million by the end 2025.
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