Vietnam Automotive Industry 2026: Growth, Imports & Outlook

Vietnam’s automotive industry has come a long way as middle-class incomes have grown, facilitating a shift from motorcycles to cars.

However, the automotive industry in Vietnam can be complex, governed by a patchwork of local regulations and free trade agreements.

In light of this, this cheat sheet breaks down the key features of Vietnam’s automotive industry that foreign investors should be aware of.

Vietnam’s automotive industry in numbers

Vietnam’s automotive industry has experienced significant growth in recent years, emerging as one of Southeast Asia’s fastest-growing markets.

This expansion is driven by increased domestic demand, rising incomes, and supportive government policies, but also significant changes in how Vietnam’s car market is structured. 

Vietnam car production / imports 2025

Vietnam car sales / exports 2025

Notes on the data:

1. VAMA = Vietnam Automobile Manufacturers Association.
2. Vinfast, Hyundai, and Mercedes-Benz Data from media reports / company websites (links embedded).
3. There are other car companies that don’t report — actual total sales may be slightly higher than stated.
4. Mercedes-Benz data 2023, 2024, and 2025 are estimates using averages of the preceding three years.
5. Export data is from Trade Map with 2025 data an average of 2021 – 2024.
6. Raw export data is in tons. Conversion used: 1 ton = 1 car.
7. Imports are preliminary data from Vietnam’s General Department of Customs.
8. Production data from the National Statistics Office.

Vietnam car imports / units

Vietnam car imports / value US$

Motorbikes

The Vietnam Association of Motorcycle Manufacturers reported fourth quarter 2025 sales of 709,034 units, down 6.8 percent year on year.

Total 2025 sales reached 2,615,057 units, a decline of 1.5 percent compared with 2024.

The association includes five members: Honda Vietnam, Piaggio Vietnam, Vietnam Suzuki, SYM Vietnam, and Yamaha Motor Vietnam.

Member companies supply the domestic market with cub, scooter, clutch, and sport motorcycle models.

Manufacturing limits

Vietnam’s role in car manufacturing is, in most cases, right at the end.

The parts are typically imported from other parts of the world, and then they are put together locally.

This part of the supply chain is mostly dominated by Truong Hai Group–known locally as Thaco Auto – which assembles vehicles for big-name brands like KIA, Mazda, and Peugeot.

However, a number of free trade agreements to which Vietnam is a party have significantly reduced, if not entirely removed, import barriers of already assembled vehicles. The ASEAN Trade in Goods Agreement, for example, has reduced car imports from member states to zero.

The European Union Vietnam Free Trade Agreement – the EVFTA – will also see import tariffs on cars from the EU come down by about  6.4 percent a year over the first ten years the deal is implemented.

The import tax on cars imported from the EU in 2024 was 38.1 percent; however, this will come down to zero by 2030, according to Vietnam’s Customs News.

Electric vehicle ownership

On the back of VinFast’s high-profile expansion plans, electric vehicle awareness has become widespread in Vietnam.

Both electric cars and motorcycles are common on the streets of Hanoi and Ho Chi Minh City, with a Deloitte global automotive consumer study finding 30 percent of Vietnamese respondents had expressed an interest in buying an electric vehicle.

That said, charging infrastructure in Vietnam is still limited outside of the big cities and is mostly being developed by Vietnam’s VinFast which can make it difficult for other electric vehicles to find a charge.

Of note, petrol shortages have been common in recent years.

Petrol prices are set by the states and have at times fallen out of step with oil prices, whereby petrol retailers have been forced to sell petrol at a loss.

The response from retailers, in many instances, has simply been to close up shop and wait until selling petrol becomes profitable again creating huge queues at petrol stations around the country. This, too, may be helping to drive consumers toward electric vehicles.

Electric vehicle incentives

Electric car buyers are eligible for some incentives in Vietnam.

Vietnam’s Special Consumption Tax (detailed below) is also considerably lower for electric vehicles than their internal combustion engine (ICE) counterparts.

For example, the smallest ICE car is taxed at 35 percent whereas the biggest electric car is taxed at most 15 percent.

Vietnam’s homegrown EV maker

Vietnam has its own electric vehicle maker, VinFast.

The company makes electric motorcycles and cars and was listed on the NASDAQ in 2023 through a Special Acquisition Company.

Vinfast has a factory in Hai Phong that is a repurposed General Motors factory, with a capacity of 250,000 vehicles a year – though it is still far from working at full capacity.

It also recently opened another factory in Ha Tinh.

That said, despite big ambitions, the nascent electric car maker has run into a number of challenges that it has struggled to surmount.

See also:

• Media Relations in Vietnam: Lessons from VinFast
• Vietnam’s Vingroup’s Q2 Financial Statements & Deteriorating Debt Profile: Unpacked
• Vietnam’s Vingroup’s 68 Lawsuits: Unpacked

Congestion

Built around motorbikes, most of Vietnam’s bigger cities are cramped with narrow streets and very little room for cars.

Not only are the streets struggling to fit all the new four-wheel vehicles, but they also lack parking space.

The answer to this has been to park cars on sidewalks and in empty lots, but these spaces are limited and have other purposes.

That is to say, Vietnam’s cities are already straining to accommodate the rise in car ownership, and the penetration rate is only around 5 percent.

If the country is to reach the numbers seen in more developed countries, there will need to be some fairly big investments in infrastructure.

See also: What Recent Traffic Reforms Say About Doing Business in Vietnam

Taxes

Vietnam has a Special Consumption Tax that is broadly applied to luxury goods. This includes cars.

For small cars with less than nine seats and 1.5-litre engines or smaller, it adds an extra 35 percent to the price.

However, this increases with every additional litre or so to 150 percent for cars with engines with a capacity of 6 litres or more.

Despite this, Lamborghini, Porsche, and McLaren all have dealerships in Vietnam.

Furthermore, cars in Vietnam are also subject to Vietnam’s Value Added Tax – this is normally 10 percent, but is currently sitting at 8 percent as part of a government stimulus package – and possibly an import tax depending on where the vehicle or vehicles are entering Vietnam from.

Industry groups

There are two key industry groups for automakers in Vietnam: the Vietnam Automobile Manufacturers’ Association and the Vietnam Association of Motorcycle Manufacturers.

Both organisations periodically release data on vehicle sales and have been known to advocate on their members’ behalf for government support.

FAQ

These are soe of the most common questions about the automotive industry in Vietnam.

Are cars popular in Vietnam?

While car sales are growing with rising middle-class incomes, motorcycles remain the dominant mode of transportation in Vietnam, with sales volumes more than double that of cars.

Do free trade agreements have an impact on Vietnam’s car market?

Free trade agreements like ASEAN and the EVFTA are reducing or eliminating import tariffs on assembled vehicles, making imported cars more price-competitive against locally assembled ones.

Are electric vehicles popular in Vietnam?

Electric vehicle awareness is growing in Vietnam, largely due to VinFast, but the charging infrastructure outside major cities remains limited and is primarily developed by VinFast.

Are more cars good for Vietnam?

Vietnam’s cities, built around motorcycles, face increasing traffic congestion and a shortage of parking spaces as car ownership rises, straining existing infrastructure.

What do foreign investors need to know about investing in Vietnam’s car industry?

Foreign investors should note the influence of local regulations and free trade agreements, the dominance of motorcycles, the growing but still nascent EV market, infrastructure limitations, and the presence of industry associations like VAMA and VAMM.

What’s next?

Vietnam’s automotive industry has a lot of moving parts, and as with most developing economies, the business environment can change quickly.

With this in mind, firms and individuals with an interest in Vietnam’s automotive industry can best keep up with the latest developments by subscribing to the-shiv.

First published June 4, 2024. Last updated January 30, 2026.