Vietnam automobiles market - Looking towards 2H2024 with multiple concerns
• In 6M-2024, Vietnam's automobiles sales decreased by -9.9% YoY, in line with our previous forecast of declining vehicle consumption in the early months of the year.• Moving into the H2-2024, we anticipate a rebound in the automobiles sector from H1-2024 amid an economic recovery and “the seasonal consumption” for automobile. However, the YoY growth is unlikely to meet initial expectations due to the potential failure of the proposed 50% reduction in registration fees.
• In the long run, the automobiles industry holds significant room growth potential due to low vehicle ownership rates among the population as theorical. However, we believe the actual growth prospects for this sector are not as substantial as expected, given inadequate transportation infrastructure and high vehicle prices (stemming from low localization rates and bulky tax/fee structures).
• Longstanding automakers in Vietnam (Toyota, Hyundai, Mazda...) are increasingly facing challenges in an expanding competitive landscape with the entry of numerous new brands (MG, Lexus, Ford...). In terms of car dealers (HAX, CTF...), they are striving to diversify their brand portfolios to seek new growth drivers rather than relying solely on a single brand.
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