Vietnam auto sale growth outperforms almost ASEAN peers in 2025

Vietnam has emerged as a major growth engine for the automobile industry in Southeast Asia, significantly outperforming most of its regional neighbors last year, according to an overview report of the ASEAN-6 automotive market by PwC.

In 2025, Vietnam’s total industry volume (TIV) grew by an impressive 20.3%, reaching approximately 542,000 units. This surge stands in stark contrast to the broader ASEAN-6 market, which saw a modest aggregate growth of just 1.9%, said the report.

While traditional regional leaders faced stagnation or decline, Vietnam’s momentum shifted the market landscape. Specifically, Indonesia experienced the sharpest decline in the region, with a 7.2% contraction due to high household debt and reduced purchasing power.

The Thai auto market remained virtually flat with a 0.1% contraction, hampered by high loan rejection rates and a sluggish economy. Malaysia’s auto market stayed steady with a marginal 0.2% growth, though it remained the largest light vehicle market in the region by total volume at 821,000 units.

Only Singapore, with a 21.3% increase driven by additional vehicle quotas, saw growth comparable to Vietnam.

The report said Vietnam’s rapid expansion is underpinned by a robust macroeconomic environment, characterized by a GDP growth of 8.02% in 2025 and rising GDP per capita (~$5,026). This has made entry-level four-wheelers (4W) affordable for a significantly larger portion of the population.

A defining feature of the Vietnamese market is the meteoric rise of the local champion, VinFast. In 2025, VinFast, the EV subsidiary of conglomerate Vingroup (HoSE: VIC) sold 175,099 vehicles, all of which were pure battery electric vehicles (BEVs).

This achievement represents the highest single-brand annual sales volume in the history of Vietnam’s automotive industry over the past 30 years. Its compact VF3 model has held the title of the country’s best-selling vehicle for two consecutive years

According to the report, the ASEAN region has become a “two-speed” market regarding electrification, and Vietnam is firmly in the fast lane. It showed that Vietnam’s xEV (EV and Hybrid) adoption rate hit 36% in 2025, far exceeding the ASEAN-6 average of 26%.

While Thailand still leads in absolute xEV production, Vietnam’s adoption is driven by unique local factors, especially 100% registration fee exemptions for EVs in place through February 2027. Affordable EVs like the VinFast VF3, priced at $12,000/unit, have effectively lowered the barrier to entry for first-time car buyers.

The report also stated that Vietnam is also a regional leader in the electric two-wheeler (E2W) segment, with VinFast selling over 235,000 E2W units by the third quarter of 2025.

By 2030, Vietnam’s light vehicle sales are projected to reach 735,000 units, reflecting its status as one of the region’s primary growth pools, it forecast.

However, the report notes that this growth has reshaped competitive strategies. Japanese incumbents, who still hold significant market share in the region (57%), are being forced to rethink their approach in Vietnam as they lose ground to VinFast and rising Chinese brands.

The Vietnamese government has set ambitious targets for EV penetration of 30% for 4W vehicles and 22% for 2W vehicles by 2030.

While the market is currently heavily dependent on VinFast, new foreign entrants, including BYD, Geely, Wuling, and Škoda, are expected to expand the range of available options and further accelerate the country’s green mobility transition.