Market Trends of Vietnam Used Car Industry
Online Booking Witnessing Major Growth
During the forecast period, the online booking segment is expected to play a crucial role in the market's development. In recent years, with the growing trend in technology, customers have preferred purchasing used car vehicles through online sales.
The rise in the number of internet users across the country is likely to enhance the use of online booking platforms in the coming years. In January 2023, Vietnam had 77.93 million Internet users, with an Internet usage rate of 79.1% of the total population.
There is a rise in the number of new used car companies entering the market, which is expected to continue in the coming years. These companies compete with existing players by providing customized services, new vehicles, and a low-pricing strategy.
To stay ahead, companies focus on providing value-added services to prospective clients, reducing service costs, and introducing premium, well-maintained vehicle models and features into their fleet to capture a significant market share.
The platform offers extra features to keep track of all necessary documents, performance, and service records of a vehicle, which has been advantageous for consumers as they can easily compare from a wide range of options and apply their desired filters to find the most suitable used car that meets their requirements.
The trend of buying used cars online through apps has increased. As a result, app developers have been improving mobile applications by adding advanced features that offer more vehicle options and comparable prices on a single platform. Additionally, the increasing internet accessibility in the country is expected to support the demand for online car purchases. For example, in Vietnam, multiple online platforms, such as Bonbanh, facilitate the purchase and sale of used cars. These apps showcase various available used cars, providing a wide range of choices.
With the entry of new used car companies into the market, competition has increased, resulting in the provision of customized services, newer fleets, and a low-pricing strategy, all aimed at attracting potential customers. This trend is expected to continue in the coming years. For instance,
- In June 2022, Oto.com.vn collaborated with CARRECT, a provider of routine car maintenance with a focus on on-demand car care, to deliver cohesive and innovative experiences to customers throughout the journey of searching, buying, and using their vehicles.
Companies are expected to continue focusing on staying ahead of the competition by offering value-added services to potential clients, reducing service costs, and introducing high-quality vehicle models and features into their fleet. This strategy is aimed at capturing a significant share of the market.
Sedans Hold a Significant Market Share
Sedans Hold a Significant Market Share
Many young customers nowadays prefer pre-owned sedans over entry-level cars, which has become a significant driving force in the used car market. Additionally, middle-income consumers' purchasing power has increased over the past two decades, allowing them to own sedans. Sedans experience a depreciation rate of almost 30% in the first year and around 5-6% in the following years.
Old cars may seem like a cheaper option at first, but sedans are the more cost-effective choice when it comes to long-term costs. Unlike sedans with lower ownership costs, owning an SUV or a truck can be quite expensive due to maintenance and fuel expenses. Finding a reliable and economical car can be a challenge, but a wide range of used sedans are both affordable and dependable.
Sedans are a great choice for those looking for a car with extra interior space. They have features that provide passengers with better comfort, such as rear AC vents and rear armrests. The seats provide additional legroom and better support, which makes passengers feel more comfortable. Nowadays, most of these features are standard in almost all sedans and some hatchbacks available in the market.
Most sales in the country are from consumers who purchased vehicles that were not so high-end, primarily from youth and businesses. Vehicles with luxurious and sporty designs are frequently purchased by upper-income consumers with a reasonable level of comfort.
Due to the global semiconductor shortage, many auto brands have no luxury cars to supply Vietnamese customers. Over the last two years, supply from the world's largest producer, China, has faced severe disruptions due to the impact of the pandemic and associated restrictions.
According to reports, Mercedes-Benz customers are currently experiencing significant wait times for certain SUV and S-class sedan models, with some waiting for at least three months. The wait time can be up to a year for the ultra-luxury Maybach sedans and SUVs. Even some locally manufactured models, such as the E-class sedans and GLC SUVs, are in short supply, with expected delivery times of 1-2 months. As a result, many auto dealers are accepting deposits but not providing specific delivery dates.
Vinh Nam, an experienced luxury car salesperson in HCMC, said customers have gotten used to the current shortage. Buyers of Porsche, Lexus, and Land Rover have the longest waiting time at 12-14 months, depending on their choice of color and options, up from the earlier 6-9 months.
With such development across the country, the demand for sedans is likely to grow in the coming years.
