Vietnam’s car market is expanding rapidly, driven by rising incomes, urban infrastructure improvements, and government initiatives. Major cities like Ho Chi Minh City, Hanoi, Da Nang, Hai Phong, and Can Tho are leading this transformation, each offering unique dynamics:
- Ho Chi Minh City: Largest market with growing demand for premium cars and electric vehicles (EVs), supported by strong infrastructure and a robust economy.
- Hanoi: Resilient market influenced by government policies like reduced fees for local cars and growing interest in EVs.
- Da Nang: Fastest-growing used car market, fueled by its location and recent infrastructure upgrades.
- Hai Phong: Strong demand for commercial vehicles, driven by its industrial base and port connectivity.
- Can Tho: A regional hub in the Mekong Delta, benefiting from agricultural prosperity and improved transport links.
Despite challenges like traffic congestion, limited EV infrastructure, and policy uncertainties, Vietnam’s car ownership reached 41 cars per 1,000 people by 2025, up from 36 in 2023. Each city presents opportunities for businesses and consumers, shaped by its local economy, infrastructure, and consumer preferences.
Quick Comparison:
| City | Key Strengths | Key Challenges |
|---|---|---|
| Ho Chi Minh City | Largest market, strong EV adoption | Traffic congestion, limited parking |
| Hanoi | Resilient market, supportive policies for EVs | Narrow streets, policy uncertainties |
| Da Nang | Growing used car market, infrastructure growth | Underutilized facilities |
| Hai Phong | Industrial hub, port connectivity | Infrastructure gaps |
| Can Tho | Regional hub, agricultural prosperity | Limited EV charging infrastructure |
Vietnam’s automotive market is evolving, reflecting the country’s economic growth and urban transformation.
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1. Ho Chi Minh City
Ho Chi Minh City has firmly established itself as a key player in Vietnam’s booming automotive market, consistently leading the charge in car sales. This dynamic growth offers an opportunity to explore the factors fueling the city’s automotive success.
Car Sales Growth Rate
The city’s car market has been growing at a pace that outstrips national averages, thanks to a thriving economy and evolving consumer preferences. Demand for premium brands like Mercedes-Benz and BMW has surged, reflecting a shift in how cars are perceived – not just as a mode of transport but also as a status symbol. This trend is particularly noticeable among younger, first-time buyers, whose enthusiasm is driving growth across various segments of the market.
Infrastructure Development
Ho Chi Minh City’s strategic focus on infrastructure has been pivotal in supporting the automotive market. Projects like the Thu Thiem Tunnel and Metro Line 1 have eased traffic congestion and improved urban mobility. Additionally, the rollout of smart parking systems in key areas has made car ownership more convenient, encouraging more residents to consider purchasing vehicles.
Economic Factors
The city’s robust economy is another cornerstone of its automotive market’s growth. Rising household incomes, bolstered by the presence of multinational companies and a flourishing startup ecosystem, have enabled more people to afford new cars. Flexible financing options, such as accessible car loans and installment plans, have further widened the market. Moreover, a steady resale market adds to the appeal of car ownership, making vehicles a reliable investment for many residents.
EV Adoption Trends
In step with global moves toward greener mobility, Ho Chi Minh City is emerging as a leader in electric vehicle (EV) adoption within Vietnam. The city has seen a noticeable rise in EV registrations, thanks to supportive government policies and initiatives from local manufacturers. The expansion of public charging infrastructure, the integration of EVs into corporate fleets, and their growing presence in ride-hailing services all highlight the city’s commitment to sustainable transportation.
2. Hanoi
As the capital of Vietnam, Hanoi’s automotive market reflects a blend of government policies and the city’s unique urban mobility needs.
Car Sales Growth Rate
Hanoi became a key player in Vietnam’s automotive boom starting in late 2024. A temporary 50% reduction in registration fees for domestically manufactured vehicles, implemented from September to November 2024, sparked increased interest in local brands like VinFast.
Even as national sales took a hit in mid-2025 – falling to 40,596 units in August 2025, a 13% month-on-month decline – Hanoi’s market showed resilience. These trends have set the stage for infrastructure projects that continue to shape the buying habits of Hanoi’s residents.
Infrastructure Development
Hanoi’s urban planning efforts have had a noticeable impact on consumer behavior. Initiatives like low-emission zones (LEZ), which limit access for older, high-pollution vehicles during peak hours, are encouraging residents to consider cleaner vehicle options. At the same time, the expansion of the city’s road networks is making car ownership more appealing and practical in this densely populated area.
Economic Factors
With a stable economy and the presence of key government institutions, Hanoi provides a solid foundation for car sales. However, rising loan interest rates are influencing buyers to prioritize vehicles with better resale value.
EV Adoption Trends
Hanoi is positioning itself as a leader in Vietnam’s transition to electric vehicles, aligning with the national goal of having 30% of four-wheeled vehicles powered by electricity by 2030. The introduction of Decree 51/2025/ND-CP, which waives registration fees for electric vehicles from March 2025 through February 2027, has further boosted interest in EVs. This policy underscores Hanoi’s commitment to modernizing its automotive market and embracing cleaner transportation options.
3. Da Nang
Da Nang, a vibrant coastal city in Central Vietnam, is quickly carving out a significant role in the automotive market. Its strategic location and ongoing development make it a hub for regional growth.
Car Sales Growth Rate
Central Vietnam, including Da Nang, is set to experience the fastest growth in the used car market, with a projected Compound Annual Growth Rate (CAGR) of 15.45% through 2030. This strong growth reflects the region’s expanding automotive sector. Da Nang’s prime location has also turned it into a magnet for car dealers from across Central Vietnam, further fueling market momentum. This surge in car sales contributes to better urban mobility solutions in the city.
Infrastructure Development
Da Nang’s recent infrastructure upgrades have been a game-changer for its automotive market. New expressways have drastically reduced delivery times, making it easier for car dealers to expand their operations with satellite lots in the region. Additionally, the growth of government-supported industrial parks in Da Nang and nearby areas has created more jobs, leading to higher disposable incomes. This economic uplift has, in turn, boosted car sales.
Economic Factors
These advancements in infrastructure and employment are driving consumer confidence and spending power. The rise in smartphone usage has also played a role by making online car marketplaces more accessible, providing buyers with transparent and convenient options for purchasing vehicles.
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4. Hai Phong
Hai Phong, Vietnam’s third-largest city and a key northern port hub, plays a significant role in shaping the country’s automotive market. Its dual identity as an industrial powerhouse and gateway to northern Vietnam opens up unique opportunities for the car market to thrive.
Car Sales Growth Rate
The city’s economy, closely tied to its bustling ports, fuels consistent growth in the demand for commercial vehicles. Additionally, Hai Phong’s competitive pricing often draws buyers from nearby Hanoi, located just 120 kilometers away. Many Hanoi residents make the trip to Hai Phong to purchase vehicles, as dealers there can offer lower prices due to reduced overhead costs.
This dynamic is further supported by a growing middle class in Hai Phong, driven by the influx of workers from nearby provinces. With rising incomes, this group is increasingly able to invest in personal vehicles, boosting overall sales. These trends are laying the groundwork for continued growth, aided by ongoing infrastructure developments.
Infrastructure Development
Recent infrastructure upgrades are transforming Hai Phong’s automotive market. The Hai Phong-Hanoi Expressway, for instance, has shortened travel time between the two cities to under 90 minutes. This enhanced connectivity has made Hai Phong an attractive hub for automotive businesses, which now see it as a strategic base to cater to both local and regional markets.
In addition, the expansion of Cat Bi International Airport and modernization of the city’s ports have drawn significant foreign investment. These developments have created jobs and increased incomes, which, in turn, drive demand for personal transportation. As residents experience improved economic conditions, the desire for cars and other vehicles naturally follows.
Economic Factors
Hai Phong’s strong economic foundation further supports its growing automotive market. The city’s thriving maritime and manufacturing industries provide stable jobs and rising wages, fueling consumer confidence and the ability to invest in vehicles. Industrial zones like the Vietnam-Singapore Industrial Park are key contributors to this stability, offering well-paying jobs that translate into higher purchasing power.
The city’s expanding logistics sector also plays a crucial role, particularly in driving the demand for commercial vehicles such as trucks and vans. These vehicles are essential for supporting port operations and the distribution of goods. Meanwhile, the presence of young professionals in manufacturing and shipping industries has increased the demand for personal vehicles, especially motorcycles and compact cars suited for city life.
To support this growth, local financial institutions are stepping up with competitive auto loan packages tailored to Hai Phong’s working population. These financing options make vehicle ownership more accessible, ensuring that people across various income levels can participate in the city’s automotive boom.
5. Can Tho
Building on the developments seen in Hai Phong, Can Tho is carving out its place as a significant player in Vietnam’s automotive market. As the heart of the Mekong Delta, Can Tho holds a strategic economic and transport position, making it a natural hub for car market growth. Its unique dynamics set it apart from other leading cities.
Car Sales Growth Rate
Can Tho’s automotive market has been gaining strong momentum, thanks to its role as the commercial hub of the Mekong Delta. Local dealerships report a steady rise in demand, coming from both urban residents and rural buyers. With a population of 1.2 million, the city’s influence extends far beyond its borders, attracting car buyers from across the delta region.
The region’s agricultural prosperity plays a big role in this growth. Rice farmers and fruit exporters, benefiting from increased incomes, are upgrading from motorcycles to pickup trucks and SUVs to support their businesses. At the same time, a growing student population and young professionals are opting for affordable, fuel-efficient cars, further boosting sales.
Infrastructure Development
Can Tho’s infrastructure upgrades have played a key role in driving its automotive market. The Can Tho Bridge, part of major connectivity projects in the delta, has significantly improved access to the city, reducing travel time to Ho Chi Minh City to under three hours. This enhanced connectivity has made Can Tho an attractive location for automotive businesses setting up regional distribution hubs.
The expansion of Can Tho International Airport has also brought a surge in business activity and tourism. With direct international flights now available, the city is seeing an influx of business travellers and investors, both of whom contribute to the local economy and fuel demand for vehicles.
Within the city, road infrastructure has seen significant improvements. New ring roads and better urban planning have made car ownership more practical, while modern business districts now offer adequate parking facilities. These developments address one of the long-standing challenges of car ownership in Vietnam’s urban areas.
Economic Factors
Can Tho’s economic diversification has been a cornerstone of its automotive market growth. As the Mekong Delta’s economic hub, the city has attracted major investments in industries like agribusiness, food processing, and logistics. Companies such as Vinamilk and Kinh Do Corporation have established operations in the area, creating high-paying jobs and boosting consumer purchasing power.
The modernization of agribusiness has also played a role, with flexible, locally tailored auto loan options making vehicle ownership more accessible. As rice processing and fruit export businesses thrive, demand for commercial vehicles like pickup trucks and vans has surged. This growth in commercial activity has also translated into higher personal incomes, further driving car purchases.
Tourism, an emerging sector in Can Tho, adds another layer to the automotive demand. Hotels, restaurants, and tour operators require vehicles for their daily operations, while the growing number of domestic tourists has led to a rise in car rental services. Together, these factors create new opportunities for the automotive industry in the region.
Advantages and Disadvantages
Vietnamese cities present a unique mix of opportunities and challenges in their fast-evolving automotive market. By carefully examining these factors, businesses and consumers can make smarter choices about entering the market or purchasing vehicles.
| City | Key Advantages | Major Challenges |
|---|---|---|
| Ho Chi Minh City | Largest market with a diverse consumer base | Traffic congestion and limited parking |
| Hanoi | Prominent political centre with stable government activity | Policy uncertainty from proposed low-emission zones and narrow streets |
| Da Nang | Fast-growing market fueled by tourism | Underutilized modern infrastructure (e.g., smart car park operating at low capacity) |
| Hai Phong | Strong industrial base and excellent port connectivity | Infrastructure gaps |
| Can Tho | Gateway to the Mekong Delta with regional significance | Significant gap in EV charging infrastructure |
Ho Chi Minh City
Ho Chi Minh City leads the way in Vietnam’s automotive market, thanks to its large and diverse consumer base. However, the city faces significant challenges with traffic congestion and a lack of parking spaces, which complicates daily commutes and vehicle ownership.
Hanoi
As Vietnam’s political hub, Hanoi benefits from stable government activity, but its automotive market is impacted by ongoing urban policy changes. Proposed low-emission zones have created uncertainty for buyers. Industry expert Nguyễn Tuấn highlighted:
"In major cities like Hà Nội, buyers are postponing purchases amid fears over future restrictions on internal combustion engine cars. High interest rates on auto loans further dampen demand."
Da Nang
Da Nang’s thriving tourism industry supports its growing automotive market. The city has invested in innovative infrastructure, such as a vertical smart car park. Unfortunately, this facility operates at only 5% capacity because affordable street parking remains the preferred option for many.
Hai Phong
Hai Phong’s position as an industrial hub with excellent port connectivity drives vehicle demand. However, infrastructure gaps continue to hinder market growth, limiting the city’s full potential.
Can Tho
As the gateway to the Mekong Delta, Can Tho holds regional importance, but it faces a critical shortage of EV charging infrastructure. Currently, Vietnam has fewer than 2,000 public charging points nationwide, far below the International Energy Agency‘s (IEA) target of 100,000–350,000 by 2040. While investments to expand EV charging networks are expected between 2026 and 2027, meaningful progress will require close collaboration among government agencies, manufacturers, utility providers, and developers.
Broader Trends
Despite these challenges, Vietnam’s automotive market continues to grow. By 2025, vehicle ownership reached 41 cars per 1,000 people, up from 36 in 2023. This growth reflects the country’s resilience and the ongoing transformation of its urban infrastructure, as local dynamics align with nationwide trends shaping Vietnam’s automotive future.
Conclusion
Vietnam’s automotive industry is evolving rapidly, with Ho Chi Minh City and Hanoi leading the way. These cities boast large consumer bases and thriving economies, making them pivotal hubs for the sector. Meanwhile, emerging markets like Da Nang, Hai Phong, and Can Tho are stepping into the spotlight, each offering distinct opportunities that businesses can tap into.
This nationwide growth is fueled by increasing incomes, fast-paced urbanisation driven by major infrastructure developments, and supportive policies from the government.
To thrive in this competitive landscape, automotive businesses need to adapt to the unique characteristics of each market. For consumers, this means access to a wider variety of vehicles and ongoing enhancements to infrastructure that will shape the future of transportation in Vietnam.
FAQs
What is driving the rapid growth of the car market in cities like Ho Chi Minh City and Hanoi?
The car market in Vietnam’s bustling cities like Ho Chi Minh City and Hanoi is growing at a fast pace, driven by a mix of economic and social factors. With economic growth on the rise and household incomes climbing, owning a car is becoming a realistic goal for more families. The emergence of a thriving middle class has further fueled this demand.
On top of that, government initiatives promoting car ownership, paired with large-scale investments in infrastructure like expanded roads and highways, have made urban areas increasingly accessible for drivers. These changes not only make life easier for car buyers but also open up new possibilities for businesses in the automotive industry.
How are infrastructure improvements driving car ownership growth in cities like Da Nang and Can Tho?
Infrastructure upgrades, like expanded road systems, enhanced public amenities, and smarter urban planning, are driving a noticeable rise in car ownership in cities such as Da Nang and Can Tho. These improvements make daily commutes smoother and more attractive, prompting more residents to consider owning a personal vehicle.
At the same time, the rapid economic growth and urbanization in these areas are leading to higher disposable incomes. This financial boost allows more households to afford cars. The combination of better infrastructure and increased purchasing power creates a more vehicle-friendly environment, making car ownership a logical and convenient choice for many families.
What are the key challenges cities like Hai Phong and Can Tho face in developing EV infrastructure, and what steps are being taken to overcome them?
Cities like Hai Phong and Can Tho are grappling with several obstacles as they work to establish electric vehicle (EV) infrastructure. Among the most pressing challenges are the limited availability of charging stations, the steep upfront costs of development, and the need to raise public awareness about the benefits of EVs. On top of that, ensuring a reliable electricity supply while integrating EV infrastructure into existing urban layouts adds another layer of complexity.
To tackle these challenges, local governments are teaming up with private companies to expand charging networks, focusing on urban centers and high-traffic zones. They’re also introducing incentives such as tax breaks, lower registration fees, and subsidies to encourage EV adoption. At the same time, there’s growing interest in investing in renewable energy sources to support the long-term development of EV infrastructure. These initiatives aim to make cities more EV-friendly and help Vietnam shift toward cleaner, greener transportation solutions.
