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Part 1: Why Vietnam must dominate its automotive and high-tech industries

Setting ambitious goals

Market scale is a critical factor in developing a genuine automotive manufacturing industry with high localization. Without a sufficiently large market, it's impossible to establish a national supply chain.

For the first time, the Ministry of Industry and Trade has outlined a target for domestic car consumption, rather than just production.

According to the draft Strategy for Automotive Industry Development to 2030 with a vision to 2045, compiled by the Ministry and currently open for public consultation, Vietnam is setting highly ambitious development goals over the next 5–20 years.

From 2025 to 2030, domestic car sales are expected to grow at an annual rate of 14–16%, reaching 1–1.1 million units - double the record highs of 508,547 in 2022 and 494,300 in 2024.

Of these, passenger vehicles (up to 9 seats) will account for 63–65%, vehicles with more than 10 seats for 6–8%, trucks for 26–28%, and specialized vehicles for 4–6%.

Electric vehicles (EVs), hybrids, solar-powered cars, biofuel vehicles, and other green alternatives are projected to comprise 18–20% of total sales.

Domestic production and assembly are expected to grow by 18–20% annually, reaching 600,000–700,000 vehicles per year, meeting about 70% of domestic demand.

From 2031 to 2045, car sales are projected to grow 11–12% annually, hitting 5–7 million units. Passenger vehicles will comprise 68–70%, larger vehicles 5–6%, trucks 23–24%, and specialized vehicles 2–3%.

Green vehicles are expected to reach 4.3–4.4 million units, or 80–85% of the total.

Domestic production will increase by 13–14% annually, totaling 4–4.6 million units and covering 80–85% of demand.

Supporting industries will supply 55–60% of domestic demand by 2030 and over 80–85% by 2045. However, the draft strategy does not specify a localization rate.

Separately, VinFast recently announced plans to produce 1 million EVs globally by 2030, with 80% localization in Vietnam by 2026.

VinFast Global Vice President Thai Thi Thanh Hai emphasized that this goal is feasible given the rapid EV growth in Asia, particularly in Indonesia and India.

Industry experts weigh in

Truong Thi Chi Binh, Vice Chair and Secretary General of the Vietnam Association for Supporting Industries, acknowledged these as very ambitious targets that may invite skepticism.

In the past, key goals for the automotive sector, especially localization and exports, have often fallen short.

"Nevertheless, such figures are essential for establishing a domestic supply chain and increasing localization," Binh noted.

With 494,300 units sold in 2024, Vietnam’s market is nearing Thailand’s domestic market (572,675 units), but lags significantly in production and exports (Thailand: 1.4 million units).

Domestic vehicles only make up 55–60% of Vietnam’s sales, with imports filling the gap. Exports remain negligible.

In 2025, Vietnam is expected to sell over 500,000 vehicles, rebounding to 2022 levels, while Thailand could reach 600,000 domestically, with total output hitting 1.5 million.

However, from 2011 to 2023, Vietnam’s annual auto market growth averaged just 8%, with a strong 17.18% between 2011–2015 but a mere 0.4% in the past five years.

Vietnam’s market size is still modest compared to regional peers, making global automakers hesitant to invest in localization.

This underscores the need for bold, accelerated efforts from businesses and policymakers to double or triple market demand.

Vietnam's auto market among world's most promising

Nonetheless, current research and statistics suggest promising signs for Vietnam’s auto future, as the country has entered the “motorization” phase (over 50 cars per 1,000 people) amid a favorable demographic.

According to the Vietnam Register, car ownership rose from 18.7 per 1,000 people in 2010 to 68 in 2024 and is projected to reach 70–72 in 2025.

For passenger vehicles, ownership was 23 per 1,000 in 2020, 34 in 2024, and is expected to reach 36–38 by 2025, with an annual growth of 5–7%.

By comparison, ASEAN countries show higher rates: Brunei (805–997), Malaysia (490–535), Thailand (275), Indonesia (82–99).

Despite having the lowest car ownership per capita in the region, Vietnam now ranks among Southeast Asia’s top four car markets alongside Thailand, Indonesia, and Malaysia. Its consumer demand growth trails only Malaysia.

A U.S. Department of Commerce analysis attributes Vietnam’s booming auto market to rapid economic growth and a rising middle class.

By 2030, car ownership could reach 30%. Vietnam is emerging as the fastest-growing and potentially most promising car market in Asia - and perhaps the world.

This outlook aligns with Vietnam’s robust socioeconomic development, expanding road infrastructure, rapid urbanization, new auto plants, and improved living standards.

In 2024, per capita GDP reached $4,700 and is expected to rise to $4,900 in 2025. By 2030, Vietnam will be a high-middle-income country with a GDP of $800 billion and per capita GDP of $7,500.

By 2045, Vietnam aims to be a high-income developed nation with a GDP of $2.4 trillion and per capita GDP of $19,000.

As incomes rise, personal transportation needs will increase, boosting car demand.

Although public transport is improving, Vietnamese consumers still favor private vehicles for their privacy, convenience, and comfort.

Based on these factors, the Ministry’s Strategy and Policy Research Institute concludes that the domestic market target of 1 million vehicles is realistic and attainable.

Moreover, the presence of pioneering firms like VinFast with global ambitions, coupled with strong government support, suggests Vietnam’s automotive market could soon surpass the 1-million-unit milestone.

Pham Huyen