HÀ NỘI — Việt Nam’s automobile market is running out of road as sales slump and consumer caution grows, casting doubt on industry forecasts for full-year growth.

So far this year about 380,000 vehicles have been sold. To meet the initial sales target of 560,000 to 580,000 units, the market would need to sustain monthly sales of 45,000 to 50,000 for the remaining four months – a goal experts now see as increasingly unlikely.

Automotive consultant Lê Anh Tuấn said that without a strong stimulus package, total sales this year will hover around 520,000 to 540,000 vehicles, matching or falling short of 2024’s figures.

August 2025 recorded the lowest monthly sales volume since March, underlining persistent challenges in a sector hit by policy changes, rising imports and economic uncertainties.

According to the Việt Nam Automobile Manufacturers Association (VAMA), its members sold 25,973 vehicles in August, a sharp 18 per cent drop from July.

Including sales from other major players such as VinFast (10,922 vehicles) and Hyundai (3,701 vehicles), total market sales fell to 40,596 units, down 13 per cent month-on-month.

This decline marks the second consecutive month of sales contraction, following three months of moderate growth, reflecting an unstable market environment.

Several factors have contributed to this uneven trajectory, including evolving environmental regulations, rising auto loan interest rates and consumer hesitation amid uncertainty.

Despite the overall slowdown, the electric and hybrid vehicle segment is poised to shine in 2025. Supported by government incentives such as reduced registration fees and increasing consumer interest in green products, this segment is expected to grow by 40 to 50 per cent compared with 2024. The Government’s long-term roadmap for the green energy transition further bolsters this outlook.

However, short-term hurdles remain. The slow development of charging infrastructure, high vehicle prices and ongoing buyer reluctance continue to limit growth potential.

The introduction of new environmental policies is profoundly influencing consumer behaviour.

Directive 20/CT-TTg, aimed at reducing pollution, alongside draft regulations for low-emission zones (LEZ) in Hà Nội, has fuelled uncertainty among buyers.

Starting in 2026, vehicles not meeting emission standards will face restrictions in certain urban areas, with phased expansions planned through 2030.

VAMA has clarified that these measures are not outright bans on petrol or diesel cars but targeted efforts to gradually limit older, high-emission vehicles.

Most new models already meet stringent emission standards, so restrictions initially apply mainly to older vehicles. Nonetheless, the lack of detailed guidelines continues to weigh heavily on consumer confidence.

“In major cities like Hà Nội, buyers are postponing purchases amid fears over future restrictions on internal combustion engine cars. High interest rates on auto loans further dampen demand,” said industry expert Nguyễn Tuấn.

Nguyễn Hoàng, co-owner of the Mỹ Đình car system, said consumers are caught in a wait-and-see mode, wary of investing large sums in gasoline cars amid unclear restrictions. This cautious mindset is compressing purchasing power across both new and used car segments.

Interestingly, while domestic sales have declined, car imports have surged. In August, Việt Nam imported nearly 15,000 fully assembled vehicles, a slight dip from July but still up 22.6 per cent compared with the same period last year.

Over the first eight months, imports grew by 28.1 per cent in volume and 38.3 per cent in value, totalling over 136,000 vehicles and US$3 billion.

Cheap imported cars, especially from Indonesia, have intensified competition, impacting the market share of locally assembled vehicles.

Given these challenges, the auto industry needs more practical measures to revive sales and boost consumer confidence. Incentives, clearer policy roadmaps and efforts to stabilise financing costs are seen as crucial to helping the market recover from its current slump. — VNS