Sales of new vehicles in the country reached 230,000 in 2019, according to the recently released Auto Care Association’s 2022 Factbook, an cumulative average growth rate of 18% since 2014. The publication forecasts that sales will increase at an average rate of 13% through 2024 to reach 352,000.

More cars will mean increased sales for aftermarket products, including engine oils and other automotive lubricants, the association noted. It added, though, that the number of vehicles is still quite low compared to Vietnam’s population of nearly 100 million people. The car parc has approximately 2 million vehicles, equating to a vehicle per capita rate of 1:50, one of the lowest in Southeast Asia.

By far the most popular mode of transportation in the country is motorbikes, which outnumber passenger cars by about 30 to 1. The Factbook forecasts that the number of cars will remain low due to the poor quality of roads in Vietnam and the relatively low level of personal incomes.

The passenger car population in the country is shifting away from ownership by private individuals to private fleets managed by companies such as Grab and Bej, which offer transportation, the Factbook stated. These operators generally are responsible for maintaining their vehicles, meaning they are becoming a bigger sales channel for suppliers of aftermarket products.

The playing field is being leveled for imported vehicles as well as imported aftermarket products, the publication concluded. Cars produced domestically have enjoyed a 50% break on registration fees, but that ended in January of this year. Import duties on aftermarket products were eliminated six months earlier, except on basic components such as bolts and rivets.