Vietnam's automotive industry is set to grow substantially over the next 5-7 years and this will likely attract additional investments in its car production. Although Vietnam is far behind other ASEAN member states in many aspects, in particular its car production, KResearch views that its car production capacity will likely increase ahead amid a transition towards electric vehicles if Vietnam accelerates improvements in various aspects. These include economic development, implementation of appropriate policies to support the automotive and auto-parts industry, strengthening lending system of financial institutions, offering all segments of the society greater access to finance and building confidence of prospective buyers towards Vietnamese-made cars.
As Vietnam's car industry is still largely underdeveloped, it needs to import a lot of cars. Given this, KResearch expects that Thai cars and auto-parts exports to Vietnam will grow steadily ahead, though such shipments may not record high growth over the long-term because of an expected increase in car and auto-parts production in Vietnam.
In 2019, KResearch projects that Thai car exports to Vietnam will reach 83,000 units, increasing 46 percent YoY, over the 57,000 units reported for 2018. In 2020, Thai car shipments to Vietnam may increase to 100,000-103,000 units, led by passenger cars, which are quite popular there.