Vietnam Used Car Market Outlook to 2029

The report titled "Vietnam Used Car Market Outlook to 2029 - By Market Structure, By Manufacturers, By Types of KMs Driven, By Age of Vehicles, By Age of Consumers, and By Region" provides a comprehensive analysis of the used car market in Vietnam. The report covers an overview and genesis of the industry, overall market size in terms of revenue, market segmentation, trends and developments, regulatory landscape, customer profiling, issues and challenges, and competitive landscape including the competition scenario, cross-comparison opportunities and bottlenecks, and company profiling of major players in the used car market. The report concludes with future market projections based on sales revenue by market product types, region, cause and effect relationship, and success case studies highlighting the major opportunities and cautions.

Vietnam Used Car Market Overview and Size

The Vietnam used car market reached a valuation of USD 6.9 Billion in 2023, driven by the increasing demand for affordable vehicles, growing population, and changing consumer preferences towards more cost-effective transportation solutions. The market is characterized by major players such as Toyota Sure, Hyundai Thanh Cong, Ford Vietnam, and VinFast. These companies are recognized for their extensive distribution networks, diverse vehicle offerings, and customer-focused services.

In 2023, Toyota Sure launched a new online platform to enhance customer experience and streamline the purchase process for used cars. This initiative aims to tap into the growing digital market in Vietnam and provide a more convenient car-buying experience. Key cities such as Ho Chi Minh City and Hanoi are significant markets due to their high population density and robust automotive infrastructure.

Market Size for Vietnam Used Car Industry on the Basis of Volume Sales in Units, 2018-2023

Source: TraceData Research Analysis

Factors Leading to the Growth of Vietnam Used Car Market

Economic Factors: The economic downturn and the high prices of new cars have significantly shifted consumer preference towards used cars. In 2023, used cars accounted for approximately 60% of total car sales in Vietnam as they offer cost savings of up to 40% compared to new vehicles. This trend is particularly pronounced among budget-conscious buyers who are looking to minimize expenses.

Growing Middle Class: The expanding middle class with limited disposable income is increasingly opting for used cars as a viable alternative to new vehicles. In recent years, the middle-income population in Vietnam has grown by 15%, and this demographic shift has driven demand for affordable and reliable transportation solutions. Used cars provide an accessible entry point to car ownership for many in this income bracket.

Digitalization: The rise of online marketplaces has revolutionized the way consumers purchase used cars, enhancing transparency and convenience. In 2023, around 35% of used car transactions in Vietnam were conducted online, reflecting a growing trend towards digital channels. These platforms offer comprehensive vehicle listings, price comparisons, and customer reviews, which have significantly boosted market growth by making the buying process more accessible and user-friendly.

Industry Challenges Impacting the Growth of Vietnam Used Car Market

Quality and Trust Issues: Concerns about the quality and condition of used cars remain significant challenges. According to a recent industry survey, approximately 47% of consumers are hesitant to purchase used cars due to fears of hidden defects and a lack of transparent vehicle histories. This issue has led to a lower trust level among buyers, potentially deterring up to 20% of prospective purchasers.

Regulatory Hurdles: Stringent regulations concerning vehicle inspections and emissions standards can limit the availability of certain older or high-mileage used cars. In 2023, it was reported that around 18% of used cars offered in the market failed to pass the mandatory inspection standards. These regulations can impose significant costs, particularly on smaller dealerships and private sellers, making it challenging for them to comply.

Financing and Credit Access: Limited access to financing and credit options is a critical barrier in the used car market, particularly affecting lower-income consumers. Data indicates that approximately 35% of potential buyers face difficulties in securing financing for used car purchases. This limitation not only restricts market access for a significant segment of the population but also constrains overall market growth.

Regulations and Initiatives Governing the Market

Vehicle Inspection Regulations: The Vietnamese government mandates regular vehicle inspections to ensure that used cars meet specific safety and environmental standards. These inspections are required annually and focus on critical aspects such as brakes, lights, and emissions. In 2022, approximately 70% of used cars passed the inspection on their first attempt, indicating a significant compliance level among vehicles in the market.

Import Restrictions on Used Cars: The government enforces strict regulations on the importation of used cars, including a maximum age limit for most vehicles. Additionally, all imported vehicles must comply with national safety and emissions criteria. In 2023, imports of used cars dropped by 10% due to stricter enforcement of these regulations.

Government Incentives for Electric Vehicles: To promote the adoption of electric vehicles (EVs), the Vietnamese government has introduced various incentives, including reduced import duties, tax exemptions, and subsidies. These incentives are particularly aimed at encouraging the entry of used electric cars into the market. In 2023, EVs represented about 2% of the total used car sales, a number expected to grow as these incentives take effect.

Vietnam Used Car Market Segmentation

By Market Structure: The industry in VN is largely unorganized due to the preference of consumers towards peer-to-peer sales, largely facilitated by online auto-classified platforms. The organized market comprises large, authorized brand dealerships as well as multi-brand outlets and exhibitions.

By Sales Channel: The unorganized sector contributed to most of the sales of used cars in the country. This higher preference for the Unorganized sector was because used cars are cheaper on these platforms. Over time preference for organized is increasing due to more convenient buying experience and value-added services (warranty, certification).

By Type of Cars: Sedans and hatchbacks were observed to dominate the used car market based on sales volume as they are economical and suitable for almost all kinds of buyers. SUVs & crossovers were found to be the second most preferred types of cars in the country and pick-ups & luxury cars contributed to the remaining sales.

By Car Brands: Toyota continues to dominate the used car market in VN due to the higher preference of the consumers towards the brand for its reliability and low maintenance. Also, the easy availability of spare parts and the higher residual value of Toyota cars contribute to higher sales. 

By Age of Vehicle: Three to five-year-old used cars were observed to dominate the used car sales in the country in 2023. As the instalment period for cars purchased on finance is around 3-5 years after which people usually prefer to sell off their cars. 1-3-year-old vehicles contributed to the second-highest sales volume as many of these cars found their way to the used car market when car rental companies’ de-fleet their existing fleet.

By Kilometers Driven: A large proportion of the used cars sold in 2023 belonged to the category of 80,000-150,000 kilometers. Cars with a mileage of 50,000-80,000 kilometres were also largely preferred by the consumers due to their nearly new look and feel and are also economical.

By Regions: The northern regions accounted for the highest share in 2023, as this region is prone to floods due to which the average replacement period is usually high and consumers prefer to buy a used car as compared to new cars for ease of replacement. It was followed by the Southern region with the highest population and the remaining market share was captured by the Central region.

By Age Group of Buyers: Most of the buyers in the used car market were observed to be in the age group 30-60 years. Many young working professionals, expatriates, and families owning multiple cars belong to this age group. The demand for used cars among the age group of 18-30 years is also increasing with increasing disposable income and job opportunities.

Competitive Landscape in Vietnam Used Car Market

The Vietnam used car market is relatively concentrated with a few major players dominating the space. However, the entrance of new firms and the expansion of online platforms such as Cho Tot Xe, AnyCar.vn, and Oto.com.vn, Bonbanh.com, Viet Han Used Cars, LSH Auto, Carmudi, Toyota Vietnam and Hian have diversified the market, offering consumers more choices and services.

Key Competitor Trends and Information

Toyota Sure: As one of the oldest automotive dealers in the region, Toyota Sure sold approximately 7,500 used vehicles in 2023. The company has been expanding its inventory to include more fuel-efficient and environmentally friendly options, responding to the increasing demand for sustainable transportation.

Hyundai Thanh Cong: A leading automotive marketplace, Hyundai Thanh Cong recorded over 5 million monthly visitors in 2023, marking a 25% increase in user engagement compared to the previous year. The platform's extensive vehicle listings and comparison tools have made it a go-to resource for car buyers in Vietnam.

Ford Vietnam: Specializing in luxury and premium vehicles, Ford Vietnam reported a 15% increase in sales of certified pre-owned vehicles in 2023. The company’s focus on providing extended warranties and exclusive service packages has been well received by customers looking for quality assurance.

VinFast: Known for its premium and luxury car offerings, VinFast saw a 10% growth in its used car sales in urban centers like Ho Chi Minh City and Hanoi. The company's emphasis on providing a personalized buying experience and tailored financing options has contributed to its strong market position.

What Lies Ahead for Vietnam Used Car Market?

The Vietnam used car market is projected to grow steadily by 2029, exhibiting a respectable CAGR during the forecast period. This growth is expected to be fueled by economic factors, increasing urbanization, and rising consumer confidence in the used car market. It is anticipated that used car sales volume will be fueled by increasing government initiatives such as EVFTA Agreement and Ban on Motorbikes by 2030, growing middle-class population, shift in consumer preference towards availing private transportation medium post COVID-19, increasing disposable income, increasing car replacement rate and growing customer confidence

Shift Towards Electric Vehicles: As the Vietnamese government continues to promote green energy initiatives, there is anticipated to be a gradual increase in both the availability and demand for electric used cars. This trend is supported by government incentives and a growing consumer awareness of environmental sustainability.

Integration of Technology: The integration of advanced technologies such as AI and big data analytics in vehicle assessment and pricing processes is expected to provide consumers with more accurate and transparent information. This technological advancement will enhance market transparency, boost consumer trust, and streamline the buying process, making it more efficient and user-friendly.

Growth of Certified Pre-Owned (CPO) Programs: The market is seeing a growing trend towards certified pre-owned programs where used cars undergo rigorous inspections and come with extended warranties. This trend is particularly strong among premium and luxury car segments, catering to consumers who seek assurance and quality in their purchases. The increasing availability of CPO vehicles is expected to attract more buyers who prioritize reliability and post-purchase support.

Focus on Sustainable Practices: There is a rising trend towards sustainable practices within the used car market. This includes initiatives such as eco-friendly dealerships, the use of recycled materials in vehicle refurbishments, and efforts to offset carbon emissions associated with vehicle sales and usage. These practices are becoming more important to environmentally conscious consumers and are expected to influence buying decisions.

Future Outlook and Projections for Vietnam Used Car Market on the Basis of Volume Sales in Units, 2024-2029

Vietnam Used Car Market Segmentation

By Market Structure:

• Auction Companies

• C2C Local Dealers

• Multi-Brand Non-Franchise Dealerships

• OEM Certified Dealers

• Organized Sector

• Unorganized Sector

• Commercial Vehicles

By Manufacturer:

• Toyota

• Hyundai

• Ford

• VinFast

By Type of Kms Driven:

• <50,000

• 150,000

• 50,000-80,000

• 80,000-150,000

By Age of Vehicle:

• 5 years

• 1-2 years

• 3-5 years

By Age of Consumer:

• 18-34

• 35-54

• 55+

By Region:

• Northern

• Southern

• Central

• Western

• Eastern

Players Mentioned in the Report

• Toyota Sure

• Hyundai Thanh Cong

• Ford Vietnam

• VinFast

• Cho Tot Xe

• AnyCar.vn

• Oto.com.vn

• Bonbanh.com 

• Viet Han Used Cars

• LSH Auto

• Carmudi

• Hian

Key Target Audience

• Used Car Dealers

• Online Car Marketplaces

• Automotive Financing Companies

• Regulatory Bodies

• Research and Development Institutions

Time Period

• Historical Period: 2018-2023

• Base Year: 2024

• Forecast Period: 2024-2029