Vietnam Automotive Aftermarket: OEM, Multi-brand Outlet Services and the Spare Parts Market Outlook to 2025

The report titled “Vietnam Automotive Aftermarket: OEM, Multi-brand Outlet Services and the Spare Parts Market Outlook to 2025: Driven by Rapid Urbanization and Growth of Vehicle Sales; fueled by Fast Growing Middle Class population and the growing preference for private vehicles in the post-COVID scenario” provides a comprehensive analysis on the status of aftermarket service industry in Vietnam. The report covers various aspects including automotive aftermarket service industry market size on the basis of revenue and number of vehicles serviced, value chain analysis, ecosystem of major entities in aftermarket service industry in Vietnam, trends & developments, issues & challenges faced by the industry, government regulations, Porter 5 forces analysis, key decision making parameters of OEM and multi brand vehicle servicing companies, technology platforms used by OEM and multi brand vehicle servicing companies, pain points in OEM and multi brand aftersales workshops, opportunities in OEM and multi brand aftermarket industry, operating model of OEM and multi brand workshops, market size of spare parts aftermarket industry in Vietnam, ecosystem by different type of spare parts &  consumables market, competition in OEM and multi brand aftermarket service industry, pricing packages of OEM and multi brand automotive service companies and other aspects. Further, the report focuses on the Vietnam Automotive Aftermarket Service Industry Segmentation by Type of Workshop (OEM/Authorized, Large Multi Brand, and Small/Unorganized Workshops); by Type of Vehicle Serviced (Sedan, SUV, Hatchback, Compact SUV, and MPV); by Age of Car (0-3 years, 3-6 years, 6-9 years, and 9 years & above); by Region (North, Central, and South); by Booking Mode(Online, and offline including telephonic and physical booking); by Service Split (Maintenance, Accident Repair & Car Care); and by Type of Spare Parts(Tires, Battery, Shocks & Struts, Alternator & Starter, Drain Plug Gasket, and Others). Vietnam Automotive Aftermarket Service Industry report concludes with projections for the future of the industry including forecasted revenue and number of vehicle serviced by 2025, and analysts’ take on the future highlighting the major opportunities.

Vietnam Automotive Aftermarket Service Industry Overview and Size

Vietnam‘s automotive aftermarket service industry has been expanding at a CAGR of ~14.9% during FY’15 and FY’20. Historically, motor bikes remain the top choice among the consumers due to high concentration of population belonging to rural regions having low purchasing power. However, due to rapid urbanization and fast growing middle class, the demand for passenger cars has been growing significantly in recent times which in turn is contributing to the growth of automotive aftermarket service industry. Since FY’18, a surge in the number of auto service and repair workshops has been witnessed throughout the country, especially in the two cities of Hanoi and Ho Chi Minh City complemented by the reduction in import tax to 0% for cars imported from ASEAN region. The growth of vehicle parc serve as one of the major growth drivers for the aftermarket industry in Vietnam in recent years. It has been estimated that vehicle parc expanded with a CAGR of ~4.2% in between FY’15 and FY’20. Most number of vehicles serviced in FY’20 were in the city of Hanoi, followed by Ho Chi Minh, Haiphong and Can Tho. Large multi brand workshops dominate the automotive aftermarket in terms of revenue generated due lower priced services they offer compared to OEM’s. However, in terms of number of vehicles serviced, small/unorganized workshops dominate the market owing to lower spare parts cost and high preference by post warranty car owners. Vehicle servicing through OEM workshops are preferred during warranty period. Also, consumers who demand high quality service and genuine spare parts prefer OEM servicing companies over multi brands and unorganized workshops.

Vietnam Automotive Aftermarket Service Industry Segmentation

By Type of Workshop (OEM/Authorized, Large Multi-Brand, and Small/Unorganized): Small/Unorganized workshops was estimated to dominate aftermarket service industry in Vietnam. Small/Unorganized workshops constituted the highest share of workshop in FY’20 followed by large multi brand workshops and OEM. Consumers prefer small/unorganized workshops due to lower priced services they offer compared to OEMs post warranty period.

By Type of Vehicle Serviced (Sedan, SUV, Hatchback, Compact SUV and MPV): Vietnam’s automotive aftermarket industry was observed to be dominated by Sedan in FY’20 on the basis of revenue generated (USD million) as well as number of vehicles serviced (units) followed by SUV, Hatchback, Compact SUV and MPV. Affordability of vehicles classified under Sedan segment is the major determinant for the demand of purchasing and servicing these type of vehicles.

By Age of Car (0-3 years, 3-6 years, 6-9 years, and 9 years & above): Vehicles in the age group 0-3 years contributed the majority share on the basis of number of vehicles serviced in FY’20 followed by  age group between 3-6 years, 6-9 years, and 9 years & above. The number of vehicles serviced between the age group 0-3 years has been on the rise since FY’18 due to the import tax reduction to 0% for cars imported from ASEAN region which enhanced the growth prospect of passenger vehicle sales.

By Region (North, Central, and South): Northern and Southern region of Vietnam dominated the automotive aftermarket with a combined share of more than 75% in terms of number of vehicles serviced in FY’20. Both the regions captures almost an equal share on the basis of number of vehicles serviced. Large population in these regions coupled presence of cities such as Hanoi and Ho Chi Minh which serve as the economic, financial and trade hub contributes to the growth of automotive as well as aftermarket services in Vietnam.

By Booking Mode (Online, and Offline): Offline medium remained the preferred choice of consumers for consuming aftermarket services in FY’20, garnering majority of the revenue share on the basis of number of vehicles serviced. Due to the lack of technological adoption by OEM and multi brand workshops, online booking system has remained inefficient over the years.

By Service Split (Maintenance, Car Care & Accident Repair): Vehicle maintenance services contributed the major portion of revenue generated in FY’20. Services under vehicle maintenance includes oil change, engine oil filter, drain plug gasket, brake fluid, tire re-alignment, and radiator coolant among others. 

Vietnam Spare Parts Aftermarket Industry

Vietnam’s spare parts aftermarket industry has been expanding at a CAGR of ~4.2% in between FY’15 and FY’20.  Demand for spare parts is driven by the fast growing middle class shifting their outlook from availing public transport to private transportation medium. As more and more consumers depend on their private transport, there would exist a demand for aftermarket services especially for spare parts replacement. Vietnam’s spare parts industry is majorly reliant on imports, therefore the domestic manufacturing firms have not been able to establish their presence as of FY’20. Government initiatives to develop the domestic spare part manufacturing ecosystem will act as a major growth driver for the spare parts aftermarket. Major Tier 1 spare parts suppliers in Vietnam include Denso, Yazaki, Sumitomo Electric, and VPIC among others.

Vietnam Spare Parts Aftermarket Industry Segmentation

By Type of Spare Parts (Tires, Battery, Shocks & Struts, Alternator & Starter, Drain Plug Gasket, and Oil & Lubricants) : Tires and batteries dominated the spare parts aftermarket in FY’20, contributing to a combined share of more than two-thirds of the overall revenue generated by the industry followed by shocks & struts, oil & lubricants, alternator & starter, and drain plug gasket.

Competitive Landscape in Vietnam Automotive Aftermarket Service Industry

The competition structure in Vietnam automotive aftermarket service industry is fragmented in nature with no single player accounting for majority of the market share. The competition in aftermarket industry is segregated between OEM/Authorized, and Multi Brand workshops. Both of these workshops compete on the basis of services offered, service fee, number of cars serviced, quality of service, sourcing of spare parts, and booking mode. Warranty on auto parts is regarded as one of the major parameters of competition between OEM service companies. OEM automotive servicing companies offer periodic maintenance pricing packages based on kilometers driven or completion of certain months of availing a vehicle. On the other hand, multi brand workshops offer vast portfolio of vehicle services at lower prices compared to OEM service companies.

Vietnam Automotive Aftermarket Service Industry Future Outlook and Projections

The market size on the basis of revenue is expected to grow at a five-year CAGR of ~8% during the period between FY’20 and FY’25. The market size on the basis of number of vehicles serviced is also expected to grow at a five-year CAGR of ~8.4% from FY’20 to FY’25. Passenger vehicle sales is estimated to surge rapidly, attributed to fast growing middle class having financial stability to shift from the historically prevalent motor bike to using four wheeler vehicles. Vehicle parc is estimated to expand at a CAGR of ~2.6% between FY’20 and FY’25E. Therefore, the increasing vehicle parc will positively contribute to the growth of the automotive aftermarket services industry. Small and unorganized workshops will continue to dominate the aftermarket services industry contributing to the majority of the market on the basis of number of vehicles serviced. Number of vehicles serviced will continue to increase rapidly in the coming years as government initiatives such as periodic inspection every 18 months will need car owners to maintain and service their vehicles regularly.

Key Segments Covered in Vietnam Automotive Aftermarket Service Industry

• By Type of Workshop
  • OEM/Authorized
  • Large Multi Brand
  • Small/Unorganized

• By Type of Vehicle Serviced
  • Sedan
  • SUV
  • Hatchback
  • Compact SUV
  • MPV

• By Age of Car
  • 0-3 years
  • 3-6 years
  • 6-9 years
  • 9 years & above

• By Region
  • North
  • Central
  • South

• By Booking Mode
  • Online
  • Offline (including telephonic as well as Physical Booking)

• By Service Split
  • Maintenance
  • Car Care
  • Accident Repair

Vietnam Spare Parts Aftermarket Segmentation

• By Type of Spare Parts
  • Tires
  • Battery
  • Shocks & Struts
  • Oil & Lubricants
  • Drain Plug Gasket
  • Alternator & Starter
  • Others

Key Target Audience

• Automotive Companies
• OEM Vehicle Service Companies
• Multi Brand Vehicle Service Companies
• Automotive Spare Parts Companies
• Government Bodies
• Automotive Associations

Time Period Captured in the Report:

• Historical Period: 2015-2020
• Forecast Period: 2020-2025

Automotive Aftermarket Service Companies in Vietnam:

  OEM/Authorized Vehicle Service Companies

• Hyundai Vietnam
• Toyota Motors Vietnam
• Honda Vietnam
• Mitsubishi Vietnam
• Ford Vietnam
• Suzuki Vietnam
• Vinfast
• Lexus
• THACO

  Multi Brand Vehicle Service Companies

• Vietnam Car Care
• Thanh Phong Auto
• Vuong Phat Auto
• Garage Doanh Workshop
• Thanh Tam Auto
• Vu Khoi Garage
• Pham Vu
• Ngyuen Khoi
• Liem Gia Phat

Spare Part Suppliers

• Denso
• Yazaki
• Sumitomo Electric
• Toyota Boshoku
• Harada
• Hanoi Plastics
• Casumina
• Kumho Tires
• Estec
• Pinaco
• Tam Hop

Key Topics Covered in the Report

• Vietnam Automotive Aftermarket Service Industry Overview
• Value Chain Analysis of Vietnam Automotive Aftermarket Service Industry
• Ecosystem of Major Entities of Vietnam Automotive Aftermarket Service Industry
• Market Size of Vietnam Automotive Aftermarket Service Industry on the basis of Revenue and Number of Vehicles Serviced, FY’15-FY’20
• Passenger Vehicle Sales in Vietnam, FY’15-FY’20
• Vehicle Parc in Vietnam, FY’15-FY’20
• Vietnam Automotive Aftermarket Service Industry Segmentation, FY’20
• Competitive Analysis of Vietnam Automotive Aftermarket
• Competition in Vietnam OEM Automotive Aftermarket Service Industry
• Competition in Vietnam Multi Brand Automotive Aftermarket Service Industry
• Company Profiles of Hyundai, Toyoto Motors, Vinfast, Mitsubishi Motors, Honda, Vietnam Car Care, Thanh Phong Auto, Vuong Phat Auto, Garage Doanh Workshop and Thanh Tam Auto
• Pricing of Major OEM Automotive Service Companies
• Pricing of Major Multi Brand Automotive Service Companies
• Trends and Developments in Vietnam Automotive Aftermarket Service Industry
• Issues and Challenges in Vietnam Automotive Aftermarket Service Industry
• Porter 5 Forces Analysis of Vietnam’s Automotive Aftermarket Service Industry
• Government Regulations in Vietnam Automotive Aftermarket Service Industry
• Key Decision Making Parameters for Automobile Servicing: OEM and Multi Brand Vehicle Servicing Companies
• Technology Platforms used by OEM and Multi Brand Vehicle Service Companies
• Analysis of Multi Brand and OEM Workshops in Vietnam
• Operating Model of Multi Brand Workshops in Vietnam
• Operating Model of OEM Workshops in Vietnam
• Pain Points in the OEM and Multi Brand Aftermarket Industry
• Opportunities in the OEM and Multi Brand Aftermarket Industry
• Spare Parts Landscape in Vietnam
• Market Size of Spare Parts Aftermarket Industry and Classification by Different Type of Spare Parts
• Ecosystem by Different Type of Spare Parts and Consumables Market in Vietnam
• Impact of COVID in the Vietnam Automotive and Aftermarket Industry
• Future Market Size of Vietnam Automotive Aftermarket Service Industry on the basis of Revenue and Number of Vehicles Serviced, FY’20-FY’25E
• Future Outlook and Segmentations for Vietnam Automotive Aftermarket Service Industry, FY’20-FY’25E
• Analyst Recommendation