Small Cars - Vietnam

Vietnam

Revenue in the Small Cars market is projected to reach US$328m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2028) of 1.25%, resulting in a projected market volume of US$345m by 2028.
Small Cars market unit sales are expected to reach 21.9k vehicles in 2028.
The volume weighted average price of Small Cars market in 2024 is expected to amount to US$16k.
From an international perspective it is shown that the most revenue will be generated in China (US$13,380m in 2024).

Key regions: Worldwide, China, United Kingdom, United States, Germany

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Analyst Opinion

The Small Cars market in Vietnam is experiencing significant growth and development in recent years.

Customer preferences: Vietnamese customers have shown a strong preference for small cars due to their affordability, fuel efficiency, and compact size. Small cars are well-suited for Vietnam's crowded urban areas and narrow streets, making them a popular choice among city dwellers. Additionally, the rising middle class in Vietnam has increased the demand for small cars as a symbol of status and mobility.

Trends in the market: One of the key trends in the small car market in Vietnam is the increasing popularity of electric and hybrid vehicles. As the government focuses on promoting sustainable and eco-friendly transportation, there has been a growing interest in electric and hybrid small cars. This trend is further supported by the improving infrastructure for electric vehicles, such as the installation of charging stations in major cities. Another trend in the market is the introduction of advanced safety features in small cars. With the growing awareness of road safety, customers are demanding small cars that offer a high level of safety. This has led to the inclusion of features such as anti-lock braking systems, airbags, and electronic stability control in small car models.

Local special circumstances: Vietnam's unique geography and infrastructure pose certain challenges for the small car market. The country's road infrastructure is still developing, with many areas lacking proper roads and highways. This can affect the performance and durability of small cars, especially in rural areas. Additionally, the high import taxes and registration fees imposed on small cars make them relatively expensive compared to other countries in the region.

Underlying macroeconomic factors: The strong economic growth in Vietnam has played a significant role in the development of the small car market. As the economy continues to expand, more people are able to afford personal vehicles, leading to an increase in the demand for small cars. Furthermore, the government's efforts to improve the business environment and attract foreign investment have resulted in the entry of international car manufacturers into the Vietnamese market, offering a wider range of small car options to customers. In conclusion, the Small Cars market in Vietnam is witnessing a surge in demand due to customer preferences for affordability, fuel efficiency, and compact size. The market is also influenced by trends such as the growing popularity of electric and hybrid vehicles and the inclusion of advanced safety features. However, challenges such as the country's road infrastructure and high import taxes need to be addressed to further stimulate the growth of the small car market in Vietnam.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on the sales of new passenger cars. Data on the specifications of the sold vehicles is based on the base models of the respective makes.

Modeling approach:

Market sizes are determined through a bottom-up approach, building on specific predefined factors for each market segment. As a basis for evaluating markets, we use company reports and websites, vehicle registries, car dealers, and environment agencies among other sources. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP and car stock per capita. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, we use the ARIMA model for the Passenger Cars market. The main drivers are GDP per capita and consumer spending per capita.

Additional notes:

The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. The market is updated twice a year. In some cases, the data is updated on an ad hoc basis (e.g., when new, relevant data has been released or significant changes within the market have an impact on the projected development).