India’s car rental app Zoomcar will leave Vietnam from end-May, 1.5 years after its debut in the Southeast Asian country in October 2021, the business announced Tuesday.
For customers, the app stops service from May 24, and will serve any bookings dated before May 24. Zoomcar will fulfill its obligations of payments to car owners normally until June 30.
In Vietnam, Zoomcar initially operated in Ho Chi Minh City and had plans to expand to Hanoi and Danang in 2023, as part of its target to become the biggest car rental service in Vietnam, said Zoomcar Vietnam CEO Kiet Pham. Vietnam’s car rental market, with a compound annual growth rate (CAGR) of 14%, can reach $884 million in 2027, he added.
The business attributed the decision to the market dynamics and projected complicated developments.
The car rental market in Vietnam has recently witnessed many new players, leading to fierce competition.
In March, Pham Nhat Vuong, chairman of Vietnam’s largest private conglomerate Vingroup, set up a new company, named GSM (Green-Smart-Mobility) JSC, offering electric car and motorbike rental and taxi services. It is the first green and integrated transport service model deployed in the world to popularize an electrified mobility experience, according to the company.
In December 2021, MoMo, a top e-wallet app in Vietnam, launched its car rental service. The move was in cooperation with Mioto, a HCMC-based car rental business. MoMo said its service would deliver cars to users’ homes and is available across major cities and provinces of Vietnam.
Foreign businesses also participate in the market. In 2017, MP Executives and Enterprise Holdings Inc. formed a partnership to launch Enterprise Rent-A-Car in Asia Pacific, starting with Vietnam. Enterprise Rent-A-Car is among the largest transportation solutions providers in the U.S.
In 2019, U.S. car rental business Hertz returned to Vietnam with initial operation in HCMC, after first-time operation in 2012. The Vietnamese franchisee, named New City Rent A Car, aims to serve foreigners in Vietnam and businesses with long-term demand to hire cars for staff.
According to vehicle registration agency Vietnam Register, as of March 15, there were 5.01 million vehicles in the country, including 454,382 ones registered in 2022. Under-nine-seater accounted for the biggest portion of 2.92 million units, followed by trucks with 1.66 million.
The total sales of Vietnam Automobile Manufacturers’ Association members, which do not include VinFast and Hyundai, increased 33% year-on-year to 404,635 in 2022. In combination with Hyundai’s figure of 81,582 and VinFast’s number of at least 22,924, the market posted a record high sales of 509,141 units last year, exceeding the 500,000 milestone.