Vietnam's auto market in 2025: Commercial vehicles gain the upper hand

Vietnam’s auto market staged a gradual recovery in volumes in 2025, but business performance across segments diverged sharply.

Intensifying competition from electric vehicles (EVs) continued to squeeze margins for passenger-car distributors, forcing many to rely on non-core income. By contrast, strong growth in commercial vehicles - particularly trucks - opened up healthier profit opportunities for companies focused on that segment.

Data released by the Vietnam Automobile Manufacturers’ Association showed encouraging sales trends in December, 2025 and for the full year.

Domestically assembled vehicle sales reached 23,826 units in December, while imported vehicles totalled 23,141 units, up 30% and 11% respectively from the previous month. For the whole of 2025, VAMA members sold 313,359 vehicles, a 6% increase from 2024. Passenger-car sales, however, slipped 1% year-on-year to 218,974 units.

That performance underscored the growing impact of EVs. In 2025, VinFast reported sales of 175,099 vehicles, up about 80% from 2024, significantly reshaping market share and weighing on the results of traditional passenger-car distributors.

Passenger-car distributors under pressure

Despite signs of improving overall demand, intense competition forced many dealers to roll out direct cash discounts rather than gift packages. Brands ranging from mass-market names such as Toyota and Ford to premium marques like BMW joined the price-cutting race to stimulate demand.

Even so, earnings remained weak at many distributors as revenues fell or margins continued to narrow.

Green Auto Joint Stock Company (HAX) reported a 16% drop in consolidated revenue in 2025 to over VND4.65 trillion ($179 million), while net profit plunged nearly 81% to VND39 billion ($1.5 million).

Documents for its 2026 AGM show the company is considering selling all or part of a 6,282 sqm property on Vo Van Kiet street, An Lac ward in Ho Chi Minh City, with a book value of more than VND542 billion ($20.87 million), to bolster working capital.

HAX, a distributor of luxury Mercedes-Benz vehicles, said price competition took a heavy toll on results.

In the mass-market segment, City Auto (CTF), an authorized dealer for Hyundai, Nissan and Ford, posted 2025 revenue of nearly VND8.45 trillion ($325.22 million), up slightly from a year earlier.

Surging selling and administrative expenses, however, pushed operating profit to a loss of VND55.7 billion ($2.14 million) compared with a profit of more than VND40 billion in 2024. Higher non-operating income helped the company post pre-tax profit of VND24 billion, highlighting the erosion of core margins.

Saigon General Services Corporation (SVC, Savico) also reported a sharp rise in profit in 2025, largely driven by non-core activities. Consolidated net revenue rose 13% to nearly VND27.95 trillion ($1.08 billion), while pre-tax profit jumped 2.7-fold to VND694 billion ($26.72 million). Net financial income reached about VND421 billion, swinging from a VND55 billion loss a year earlier.

In addition, SVC is expanding sales through trade credit leverage, accepting large upfront payments to suppliers and selling on credit to customers, which has strained cash flow. By the end of 2025, receivables stood at over VND1.47 trillion (VND56.76 million), prepayments to suppliers at VND899 billion, and long-term borrowings had risen by nearly VND1 trillion.

Overall, mounting EV competition and a tougher retail environment have pushed passenger-car distributors to raise spending to defend market share. Reliance on financial income or other non-core revenue streams carries sustainability risks as core operations struggle.

HAX eyes EV distribution

According to documents for its 2026 AGM, HAX plans to seek shareholder approval to acquire 65-85% of Future Vietnam Group (VFG), which operates a nationwide network of VinFast EV dealerships. The move is seen as timely as EVs emerge as a new growth driver while HAX’s traditional business shows signs of decline.

Commercial vehicles in the spotlight

In contrast, VAMA data showed commercial vehicles - especially trucks - emerged as a bright spot in 2025. Truck sales jumped 24% to 70,746 units, the second-largest segment by volume. Brands such as Hino and Thaco Truck recorded strong growth, reflecting rising freight demand.

Vietnam Machinery Development Investment (VVS), which focuses on truck distribution with Howo as its core product, was a clear beneficiary. In the fourth quarter of 2025, revenue surged 115% year-on-year to nearly VND2.61 trillion ($100.35 million).

Full-year revenue rose about 107% to VND8.05 trillion ($309.97 million), while pre-tax profit jumped more than fourfold to VND407 billion ($15.67 million). Despite rapid asset growth under a “sell first, collect later” policy, the company maintained prudent leverage with no long-term debt.

TMT Motor (TMT) also returned to profit after heavy losses in 2024. The company posted 2025 revenue of over VND2.11 trillion ($81.36 million) and net profit of VND62.7 billion ($2.41 million), helped by a sharp fall in cost of goods sold.

It said in a filing to the State Securities Commission that results did not fully reflect potential due to supply shortages that delayed deliveries, particularly of trucks over 10 tons - its highest-value products.

Accelerated public investment disbursement and a wave of large-scale infrastructure projects in 2025 boosted demand for trucks and specialized vehicles. MMR Statistics forecasts the global commercial vehicle market will expand from $932 billion in 2025 to $2,553 billion by 2032, with a compound annual growth rate of 8.91%, driven by logistics expansion, infrastructure investment, and e-commerce.

Selling costs mark the difference

Commercial-vehicle companies generally enjoy better margins than passenger-car distributors, partly due to lower selling costs as a share of revenue. Passenger cars are mainly sold to individual buyers, while commercial vehicles are often purchased in bulk by transport firms. Passenger-car dealers also face higher staffing and showroom costs, typically in city centers.

In 2025, HAX, CTF and SVC all reported selling expenses exceeding 4% of revenue and rising, reflecting intensifying competition. By contrast, TMT kept the ratio lower at around 3%, while VVS further reduced selling costs, signalling a clear improvement in demand for commercial vehicles.