Vietnam’s automotive industry is quickly becoming a major attraction for global investors, especially Chinese automakers. With companies like Geely, Great Wall Motor, and BYD entering the market, alongside Tasco and Thanh An Group, the stage is set for unprecedented growth and transformation in the sector.
On September 24, 2024, Geely signed a contract with Tasco to manufacture Geely and Lynk & Co vehicles in Vietnam. Great Wall Motor is also partnering with Thanh An Group to begin production in late 2025. These deals signify that Vietnam’s automotive industry is poised for a new era, driven by rising demand and favorable investment conditions.
Strategic Growth in Vietnam’s Automotive Sector
According to the Ministry of Industry and Trade’s draft development strategy for the automotive industry through 2030, the total number of cars sold in Vietnam is expected to reach 1-1.1 million vehicles. The average annual growth rate is projected to be 14-16%. By 2030, 350,000 electric and hybrid cars are projected to be sold, a significant step toward cleaner, more sustainable transportation.
Looking ahead to 2045, the Vietnamese automotive market is forecasted to grow by 11-12% annually. Total vehicle numbers will reach 5-5.7 million. Notably, 80-85% of these vehicles will be electric or use clean energy, reflecting global trends toward sustainability. Domestic assembly production is expected to hit 4-4.6 million vehicles, meeting 80-85% of local demand.
This growth is remarkable, especially considering that the 2030 target is more than 2.5 times the total number of vehicles registered by the end of 2023. The rising middle class, expanding infrastructure, and government policies are all driving this surge in demand.
Government Support and Supply Chain Development
The Vietnamese government is actively encouraging the development of the automotive sector. Various tax breaks, reduced tariffs, and infrastructure investments are being implemented to support this growth. The goal is to increase the proportion of domestically assembled vehicles to 70% by 2030. By 2045, this proportion is expected to reach 87%. This will help Vietnam reduce its reliance on imported cars. Imported cars currently account for more than 40% of the market.
Furthermore, Vietnam is focusing on developing its automotive supporting industries. It aims to supply 55-60% of domestic demand for components by 2030. This is expected to rise to 80-85% by 2045. This will involve adopting new technologies to produce critical parts. These parts include gearboxes, drivetrains, and engine bodies. This will help Vietnam position itself as a key player in the global automotive supply chain.
Opportunities and Challenges in Vietnam’s Automotive Market
With approximately 30,000 mechanical enterprises, Vietnam has the foundation to support a thriving automotive industry. However, challenges remain. The quality of human resources in the mechanical sector, critical for operating high-tech equipment, needs to improve. The country has made strides in producing simpler, labor-intensive components like seats and large plastic parts. It still relies on imports for complex, high-tech components such as engines and gearboxes.
Despite these hurdles, the rise of electric vehicles (EVs) and clean energy vehicles shows promise. This progress is supported by government policies and strategic investments. These factors point to a bright future for Vietnam’s automotive industry.
Why Foreign Investors Should Enter the Vietnamese Market
For global investors, Vietnam offers an ideal combination of market growth, government support, and strategic location within Southeast Asia. Vietnam’s proximity to other major automotive markets like Thailand and Indonesia makes it a prime location for automotive production and a gateway to the region.
With foreign investments from companies like Geely, BYD, and Great Wall Motor, Vietnam is on the verge of becoming a hub for innovation and technology transfer. The future of Vietnam’s automotive sector is bright, with rapid growth expected in both domestic production and exports. Now is the perfect time for foreign investors to take advantage of the opportunities in this booming market.
Lean Innovation Technology Co. Ltd. 
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