Vietnam gears up to navigate shift in automotive industry

Vietnam gears up to navigate shift in automotive industry

Vietnam’s automotive market is poised to improve its value chain and tap into new opportunities amid the changing global landscape.

Vu Ba Phu, director of the Trade Promotion Agency under the Ministry of Industry and Trade, said, "Over the past few years, Vietnam’s automotive market has witnessed impressive growth. The market is forecast to register a growth rate of 12 per cent in 2025 compared with 2024, bolstered by economic growth, growing per capita income, and rising demand for personal vehicles. This growth has been attributed to car sales, diverse product lines, a robust second-hand car market, and improved after-sale services."

He further noted investments in traffic infrastructure have created a major boost to the entire industry. Modern infrastructure helps optimise logistics, reduce transport costs, and improve the efficient operation of vehicle companies. However, local competitiveness and manufacturing capability are vital factors to ensure sustainable development and improve Vietnam’s position in the global automotive market.

According to the Ministry of Industry and Trade, the development of Vietnam’s automotive market is associated with supporting industries. To promote supporting industries, Vietnam has set a target of producing 55-60 per cent of components and spare parts domestically by 2030 and 80-85 per cent by 2045.

"To facilitate the goal, Vietnam needs to step up the application of technology to manufacture important parts and components such as transmissions, gearboxes, engines, and car bodies," Phu said. "By increasing the localisation rate, carmakers can reduce product costs, improve competitiveness, and create thousands of high-quality jobs, contributing to local economic development."

"Vietnam also needs to navigate the risk of losing market share to the developing vehicle industry in regional countries such as China and Thailand, which requires the issuance of support policies in line with global technology trends," he emphasised.

Automechanika Ho Chi Minh City 2025, which is taking place in Ho Chi Minh City from June 19 to 21, showcases the future of the automotive value chain while highlighting the industry’s culture. Aiming to capitalise on the unique strengths of the Vietnamese market, 401 exhibitors from 16 countries and regions are participating in the event, including players from China, France, Germany, Hong Kong, India, Italy, Japan, Korea, Malaysia, Saudi Arabia, Singapore, Taiwan, Thailand, the UAE, the US, and Vietnam.

Additionally, pavilions from countries and regions such as China, Germany, Korea, Malaysia, Singapore, and Taiwan bring a robust line-up of exhibitors who are keen to showcase their latest innovations.

The combination of interactive activities, product showcases, and knowledge sharing in this space aims to connect Vietnam’s thriving market with international opportunities. Participants will gain insights into the latest advancements in AI, digitalisation, electrification, and other technologies driving the future development of OEMs and the aftermarket in the automotive industry.

Fiona Chiew, general manager of Messe Frankfurt (HK) Ltd., said, “Automechanika Ho Chi Minh City is a significant regional platform that reflects Vietnam’s rising status as a favoured investment destination for foreign companies. A key factor behind this transformation is the shift in the automotive industry, driven by new energy adoption and the establishment of supply chains. These developments play a crucial role in nurturing Vietnam’s economic growth, technological advancement, lifestyle needs, and job creation.”

VIR