- Government initiatives to ban motorbikes by 2030 and improved road condition to curb traffic congestion will act as a catalyst for the shift in consumer preference from two wheelers to four wheelers.
- The preference towards used vehicles is expected to surge rapidly due to its lower price compared to their newer counterparts which is favorable to the fast growing middle class population in Vietnam.
Digital is
the Future
Entities operating in Vietnam
Used Car Industry are enhancing their digital presence to increase their online
visibility among consumers. The era of COVID-19 witnessed consumer’s shifting
preference in utilizing online platforms for their purchases compared to the
traditional method of physical visits. Thereby, dealerships network is
leveraging the opportunity to extend information to customers through their
social media platform and collaboration with classified platforms.
Shift in
Consumer Preference towards availing Private Transportation Medium
Due to the increased awareness on
health and hygiene followed by the advent of COVID-19, consumers are preferring
availing private transportation compared to public transport medium. Passenger
vehicle sales in Vietnam is expected to expand at a CAGR of ~17.6% in between
2021 and 2026. Rapid urbanization in coming years in northern and southern
region of country especially in cities such as Ho Chi Minh and Hanoi for better
employment opportunity and increased financial stability will contribute in
consumer’s adaptation to four wheeler vehicles compared the predominant
motorbike usage.
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Improved
Road Condition and Ban on Motorbikes by 2030
Historically, motorbikes have
been the predominant medium of transportation in Vietnam attributed to its
flexibility and affordability. However, government initiative to ban motorbikes
in 2030 in Hanoi is going to contribute to the shift in consumer preference
towards availing four wheeler vehicles. Weak road condition in Vietnam has been
a challenge which negatively impacts the traffic condition in the country. With
recent policies by the government to improve road infrastructure facilities to
curb traffic congestion, preference towards passenger vehicles is expected to
witness a boost. Further, the government of Vietnam has proposed a regulation
wherein import of used vehicles older than 5 years has been discontinued which
is expected to boost the sales of domestically produced used vehicles.
Fast Growing
Middle Class Population and Growth in Disposable Income
GDP per capita of Vietnam in 2020
stood at USD 2,785, which is expected to gradually rise and attain the status
of fastest growing economy in the ASEAN region by the end of 2022. The rise in
disposable income of consumers is enabling them to purchase passenger vehicles.
However, due to lack of infrastructural ability and possible cause of wear
& tear, the depreciation rate of newer vehicles in the first 3 years is
high, which serve as an opportunity for the used car market to integrate in
future. Over the coming decade, an addition of 23.2 million people to the
middle class of Vietnam is expected, taking the population of middle-class
people in the country to about 56 million people by the year 2030. Rapid
urbanization in the region complements the demography change as consumers are
shifting to urban cities for better job opportunities. Increasing financial
stability of consumers will lead them in availing private medium of
transportation for better convenience compared to public transportation.
Support from
Automobile Financing Entities
Financial entities extending
support to provide credit to customer’s willing to avail private transportation
medium will shape the Vietnamese Used Car Market. It is estimated that in
between 2021 and 2025, total credit loans disbursed will expand at a CAGR of
~17%. Financing facilities helps the middle class population in availing
immediate loan for automotive purchases. Banking institutions, NBFCs and
Captive Companies are the major entities which contributes in providing
financial support to the customer. In 2025, it is estimated that banks would
dominate the auto-financing market due to the lower interest rate charged
compared to NBFCs or captive dealers.
The publication titled “Vietnam
Used Car Market Outlook to 2026 (Second Edition): 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
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By Vehicle
Brand
- Toyota
- Ford
- Kia
- Honda
- Hyundai
- Others
By Channel
Purchase
- Organized Purchase
- Non-Organized Purchase
By Financed
vs Non-Financed
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
Key Topics
Covered in the Report:-
- Vietnam
Used Car Industry Research Report
- Overview of Vietnam Used Car Market
- Ecosystem of Vietnam Used Car Industry
- Vietnam Used Car Online and Offline 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
- Overview of Aftermarket Services Industry in
Vietnam
- Overview of Spare Parts Industry in Vietnam
Related
Reports:-
Contact Us:-
Ken
Research
Ankur
Gupta, Head Marketing & Communications
+91-9015378249
