Vietnam Used Car Market Outlook to 2028

Vietnam Used Car Market Overview

• The Vietnam used car market has experienced significant growth, reaching a valuation of VND 161,344.7 bn. This expansion is primarily driven by the increasing demand for affordable vehicles, a growing population, and shifting consumer preferences towards cost-effective transportation solutions. The economic downturn and high prices of new cars have significantly shifted consumer preference towards used cars, as they offer cost savings of up to 40% compared to new vehicles.

• Key cities such as Ho Chi Minh City and Hanoi dominate the used car market in Vietnam. This dominance is attributed to their high population density and robust automotive infrastructure, which facilitate greater demand and supply of used vehicles. Additionally, these urban centers have a higher concentration of affluent consumers and better-developed transportation networks, further bolstering their leading positions in the market.

Vietnam Used Car Market Segmentation

Vietnam Used Car Market is divided into further segments:

• By Vehicle Type: Vietnam Used Car Market is segmented by vehicle type into SUVs, Sedan, Hatchback, MPVs, and Others. The SUV segment holds the dominant position in Vietnam's used car market. The preference for SUVs is driven by their versatility, durability, and suitability for Vietnams mixed urban and rural road conditions. With a high ground clearance, larger seating capacity, and better safety features, SUVs have become the top choice among families and business users.

• By Vehicle Age: Vietnam Used Car Market is segmented by vehicle age into 0-3 years, 3-5 years , 5-7 years, and 7+ years. Used cars aged between 0-3 years dominate the market with a 33.6% share. These vehicles are highly preferred due to their relatively new condition, lower depreciation, and manufacturer warranties that still apply in many cases.

Vietnam Used Car Market Competitive Landscape

The Vietnam used car market is marked by the presence of both established automotive manufacturers and specialized used car dealers. The market is highly competitive, with key players leveraging their strong dealership networks, digital platforms, and customer trust to maintain dominance.

Vietnam Used Car Industry Analysis

Market Growth Drivers

• Growing Vehicle Ownership: Vietnams vehicle ownership has surged significantly, marking a 160% increase over recent years. The country now has 60 cars per 1,000 people in 2023, compared to just 23 cars per 1,000 people in 2018. This sharp rise in car ownership can be attributed to the increasing middle-class population, rising disposable incomes, and a shift from two-wheelers to four-wheelers due to better affordability, improved financing options, and changing consumer aspirations.
• Government Policies and Tariff Reductions: The Vietnamese government has implemented several favorable tax policies that support the growth of the used car market. One of the key measures includes the 0% import tariff on auto components sourced from ASEAN countries under the ASEAN Free Trade Agreement (AFTA).
• Expansion of Online Marketplaces: Digital platforms have revolutionized the used car buying and selling experience in Vietnam. Leading online marketplaces like Chotot, Bonbanh, and Oto.com.vn have simplified the process by offering detailed vehicle listings, price comparisons, financing options, and direct customer-to-customer sales. The automotive segment of Chotot alone saw a 30% year-on-year growth in used car listings in 2023, reflecting the growing reliance on digital solutions.

Market Challenges

• Taxation and Regulatory Challenges: The Vietnamese government frequently revises Special Consumption Tax (SCT) policies, which significantly impact the overall automotive sector, including the used car market. In an attempt to stabilize the market, the government approved a tax payment extension worth approximately $336 million for 2024, helping to ease the financial burden on automakers and dealers.
• High Tax Rates on Imports: While Vietnam benefits from a 0% import tax on vehicles sourced from ASEAN countries like Thailand and Indonesia under regional trade agreements, imported cars from non-ASEAN nations face substantial levies. Vehicles from Germany and France, for example, are subject to import taxes ranging between 56-74%, making luxury European brands significantly more expensive in the secondary market.

Vietnam Used Car Future Market Outlook

Over the next five years, the Vietnam used car market is expected to show significant growth reaching a market size of VND 342,681.7 Bn by 2028, driven by continuous government support, advancements in automotive technology, and increasing consumer demand for affordable transportation solutions. The expanding middle-income population in Vietnam has also contributed to the growth of the used car market.

Market Opportunities

• Growing Urbanization and Infrastructure Development: Vietnams rapid urbanization continues to shape consumer preferences in the automotive industry. As of recent years, the urban population surpassed 40%, with projections indicating further growth in major metropolitan areas like Hanoi, Ho Chi Minh City, and Da Nang. This urban expansion is fueling higher demand for personal vehicles, especially in cities with improved road networks, expressways, and transportation hubs.
• Digitalization and E-Commerce Expansion: Vietnams 95% internet penetration rate presents a major opportunity for the digitalization of the used car market. Online platforms such as Ch Tt Xe, Oto.com.vn, and Bonbanh are expected to play an increasingly dominant role in facilitating vehicle transactions. With the integration of AI-powered price estimators, virtual vehicle inspections, and blockchain-based ownership verification, these platforms are set to enhance trust and transparency in the used car market.