Vietnam Automotive Aftermarket Service Market Outlook to 2028

Vietnam Automotive Aftermarket Service Market Overview:

Vietnam Automotive Aftermarket Service Market was valued at USD 3 Bn in 2023, driven by increasing awareness of regular maintenance, rising disposable income and a growing middle class. The expansion of e-commerce platforms for auto parts and services has also contributed to the market's steady growth.

Market is dominated by several key players including Kia, Hyundai, Mazda and Vinfast. These companies have established strong networks of service centers across the country and continue to expand their product and service offerings to cater to the rising demand for automotive maintenance and repair services.

In 2024, Ford Vietnam was awarded the First-Class Order of Labor by the Vietnamese State. This recognition highlights the company's 28-year commitment to Vietnam and its substantial contributions to the local economy, including an investment of $208 million and the creation of over 5,000 jobs.

Ho Chi Minh City and Hanoi are the dominant cities in Vietnam's automotive aftermarket service market. Ho Chi Minh City is the largest market due to its dense population and high vehicle ownership rates. The rapid urbanization, high concentration of automotive service centers, and the presence of major automotive companies in these cities contribute to their dominance in the market.

Vietnam Automotive Aftermarket Service Market Segmentation:

By Type of Workshops: Vietnam automotive aftermarket service market is segmented by workshop type into OEM/Authorized Workshops, Large Multi-Brand Workshops and Small /Unorganized Workshops. In 2023, OEM/Authorized Workshops has dominated the market driven by their advanced diagnostic tools, skilled technicians, and strong brand reputation, which attracted a higher number of customers seeking reliable and quality services.

By Age of Cars: Vietnam automotive aftermarket service market is segmented by age of cars into 0-3 Years, 3-6 Years, 6-9 Years and 9 Years and above. In 2023, 3-6 Years old cars have dominated the market due to the increasing need for regular maintenance and part replacements as these vehicles approach mid-life, making them more frequent visitors to service workshops.

By Region: Vietnam automotive aftermarket service market is segmented by region into North, Central & South. In 2023, North region have dominated the market benefiting from its higher concentration of urban centers, leading to a larger vehicle population and greater demand for aftermarket services. The region's well-established infrastructure and presence of key automotive hubs also contributed to its leading position in the market.

Vietnam Automotive Aftermarket Service Industry Analysis:

Vietnam Automotive Aftermarket Service Market Growth Drivers:

Increasing Vehicle Ownership: In 2023, the total automobile sales in Vietnam dropped by approximately 20.6% to 404,294 units, which includes both locally produced and imported vehicles. This increase is particularly noticeable in major cities like Ho Chi Minh City and Hanoi where the vehicle density is the highest in the country.

Expansion of E-commerce Platforms: By 2022, the number of e-commerce users reached 48.5 million. This growth is fueled by the increasing adoption of digital shopping, particularly in urban areas, where consumers prefer the convenience of ordering parts online and having them delivered or installed at their convenience.

Government Support for Electric Vehicles (EVs): Vietnams government has set an ambitious target for increasing the adoption of electric vehicles (EVs) by offering incentives like 0% registration fee for battery electric vehicles for three years starting from March 1, 2022. This rise in EV adoption is driving the need for specialized aftermarket services, such as battery replacement, electric motor servicing, and software updates.

Vietnam Automotive Aftermarket Service Market Challenges:

High Overhead Cost: Vietnamese Original Equipment Manufacturers (OEMs) face significant overhead costs, primarily due to their reliance on imported genuine components and spare parts, which increases operational expenses by 15% to 20%. Additionally, these OEMs must make substantial investments in marketing and customer relationship management to maintain their market share, further contributing to the overall cost burden in the competitive landscape.

Quality and Reliability Perception: Vietnamese OEMs incur high overhead costs, with operational expenses rising by 15% to 20% due to reliance on imported components. To retain market share, they also invest heavily in marketing and customer relationship management, further adding to their financial burden in an increasingly competitive environment.

Vietnam Automotive Aftermarket Service Market Government Initiatives

Collaboration with International Firms: The Ministry of Industry and Trade (MoIT) is upgrading two technical centers in the North and South to support industrial growth. These centers work with international companies, including Toyota, to identify and develop potential suppliers for their value chains, fostering stronger collaboration between local and global firms, thereby enhancing Vietnam's industrial capabilities and competitiveness in the global market.

Supporting Industry Development Programme: The Vietnam governments Supporting Industry Development Programme (until 2025) helps Vietnamese enterprises adopt modern standards and systems to boost domestic production in key sectors like automobiles. The government aims for supporting industry products to meet 70% of local demand by 2030, with expectations that around 2,000 companies will be capable of supplying directly to multinational corporations by that time.

Vietnam Automotive Aftermarket Service Competitive Landscape:

Company

Vintage

No. of Service Centers

Services Offered

Kia

2007

104

Periodic Maintenance

Repair Service

Hyundai

2011

93

Periodic Maintenance

Repair Service

Spare Parts

Accessories

Toyota

1995

86

Periodic Maintenance

Repair Service

Car Beauty Care Service

Mazda

2011

52

Periodic Maintenance

Repair Service

Ford

1995

49

Periodic Maintenance

Repair Service

Suzuki

1995

40

Periodic Maintenance

Maintenance Inspection

Repair Service

VF3 by Vinfast: In 2024, VinFast has officially launched the VF 3, a mini electric SUV, in Vietnam, with a starting price of $9,200. This vehicle is designed to cater to the mass market, aiming to become a popular choice among consumers in Vietnam and potentially other Asian markets.

Hyundai IONIQ 5: In 2023, Hyundai began local production of the IONIQ 5 to expand in Vietnam's electric vehicle market and is assembled locally, aiming to cater to the growing demand for electric vehicles in the region. By producing the IONIQ 5 domestically, Hyundai aims to reduce costs and improve supply chain efficiency, which is crucial for capturing market share in the rapidly evolving EV landscape.

Vietnam Automotive Aftermarket Service Future Market Outlook:

Vietnam Automotive Aftermarket Service market is poised for significant growth as the market is expected to reach USD 6 Bn in 2028, driven by the rising adoption of electric vehicles (EVs) and the governments ongoing initiatives to promote sustainable automotive practices.

Future Market Trends:

Growth of Electric Vehicle Aftermarket Services: In the coming years, the aftermarket service sector in Vietnam will increasingly cater to the growing population of electric vehicles. As EV adoption accelerates, the market will see a rise in dedicated EV service centers equipped with advanced diagnostic tools and trained technicians.

Digitalization of Automotive Services: The digitalization trend in Vietnams automotive aftermarket will gain momentum, with more service providers adopting online platforms for service booking, diagnostics, and customer engagement. The integration of AI and IoT in service operations will enhance efficiency, reduce service times, and improve customer satisfaction.