Vietnam Steering Market Outlook to 2030

Vietnam Steering Market Overview

• The Vietnam steering market has experienced notable growth, this is reflected by global steering market reaching a valuation of USD 22 Bn in 2023. This growth is driven by the increasing demand for automobiles, the rise in disposable income, and the growing urban population, which has led to a higher need for personal and commercial vehicles equipped with advanced steering systems.
• The Vietnam steering market is dominated by several key players, including Hyundai Mobis, Bosch, ZF Friedrichshafen AG, NSK Ltd., and JTEKT Corporation. These companies have established a strong presence in the market through continuous innovation, strategic partnerships, and extensive distribution networks.
• Market is facing challenge high cost of raw materials. In 2023, the prices of steel and aluminum, which are essential for manufacturing steering components, increased. This rise in raw material costs puts pressure on manufacturers, affecting their profit margins and increasing the overall cost of steering systems. The challenge is expected to persist in 2024, necessitating the need for cost-effective manufacturing solutions.
• The Ho Chi Minh City, dominates the steering market due to its well-established automotive industry and robust infrastructure. The region’s dominance is attributed to the presence of major automotive manufacturers and suppliers, availability of skilled labor, and strategic location, which facilitates easy access to raw materials and export markets.

Vietnam Steering Market Segmentation

The Vietnam Steering Market can be segmented based on several factors:

By Product Type: Vietnam steering market segmentation by product type is divided into hydraulic power steering, electric power steering and electro-hydraulic power steering. In 2023, HPS dominated the market due to its long-standing presence and reliability in heavy-duty vehicles, such as trucks and buses, where the demand for robust and durable steering systems is high.

By Vehicle Type: Vietnam steering market segmentation by vehicle type is divided into passenger cars, commercial vehicles and EVs. In 2023, passenger cars held the largest market share. The high market share is attributed to the growing middle-class population, increasing urbanization, and rising disposable income, which boost the demand for personal vehicles.

By Region:  The Vietnam steering market is segmented into North, South, East, and West regions. In 2023, the Northern region held the largest market share, driven by the presence of major automotive manufacturing facilities and favorable government policies. This region's strong industrial base and supportive infrastructure have significantly contributed to its leading position in the market.

Vietnam Steering Market Competitive Landscape

•  Bosch’s Facility Expansion: By end of 2024, Bosch will expand its manufacturing facility in Dong Nai Province. This expansion aims to increase the production capacity of advanced steering systems by 20%, addressing the growing demand in both domestic and international markets.
• Hyundai Mobis’ New R&D Center: Hyundai Mobis inaugurated a new research and development center in Ho Chi Minh City in 2024, with an investment of USD 50 Mn. The center focuses on developing next-generation steering technologies, including advanced driver-assistance systems (ADAS) and autonomous driving steering solutions.

Vietnam Steering Industry Analysis

Vietnam Steering Market Growth Drivers:

• Increase in Vehicle Production: In 2024, the production of vehicles in Vietnam is projected to reach 400,000 units, driven by the rising demand for both personal and commercial vehicles. The increasing number of automotive assembly plants in the country, supported by foreign direct investment, contributes to the growing demand for steering systems. This surge in vehicle production is a critical growth driver for the Vietnam steering market.
• Expansion of Automotive Component Manufacturing: The Vietnamese government has incentivized the establishment of automotive component manufacturing facilities. As of 2024, over 200 new automotive component manufacturing units have been established, contributing significantly to the local supply chain. This expansion is crucial for meeting the demand for advanced steering systems and supporting the overall growth of the steering market.
• Rising Investments in R&D: Major players in the Vietnam steering market are significantly increasing their R&D investments. For instance, Hyundai Motor Group announced a substantial investment of USD 18 billion in 2024, specifically targeting advancements in steering technologies and EV components. This move aims to enhance their market position and competitiveness in Vietnam's rapidly evolving automotive sector, emphasizing the importance of innovation and technological development in steering systems.

Vietnam Steering Market Challenges:

• High Raw Material Costs: The prices of essential raw materials like steel and aluminum have been on the rise. In 2024, the cost of steel increased. This increase in raw material costs exerts pressure on the profit margins of steering system manufacturers, making it a significant challenge for the market.
• Supply Chain Disruptions: The global supply chain has faced multiple disruptions due to geopolitical tensions and logistical challenges. In 2024, the average lead time for the delivery of critical components like electronic chips has extended to 24 weeks. These disruptions impact the timely production and delivery of steering systems, posing a challenge to manufacturers.

Vietnam Steering Market Government Initiatives:

• Incentives for Electric Vehicles: To promote the adoption of electric vehicles (EVs), the government introduced incentives, including 0% registration fee, tax reductions and subsidies for EV manufacturers. In 2024, a budget was set aside for these incentives. This policy supports the development and adoption of advanced steering systems tailored for EVs, driving market growth.
• Infrastructure Development: The Vietnamese government is investing heavily in infrastructure development to support the automotive industry. The government aims to scale up the current 1,290 km of national highway to 5,000 km by 2030. This development facilitates the efficient movement of automotive components, including steering systems, thereby supporting the market growth.

Vietnam Steering Future Market Outlook

The Vietnam Steering market is expected to show significant growth by 2028. This growth is driven by advancements in steering technologies, such as electric power steering (EPS) systems, increased automotive production, and favorable government policies promoting the automotive sector.

Future Trends

• • Adoption of Electric Power Steering (EPS) Systems: By 2028, electric power steering (EPS) systems are expected to become the standard in Vietnam’s automotive industry. The adoption of EPS is anticipated to increase due to its benefits in fuel efficiency and integration with advanced driver-assistance systems (ADAS). The production of EPS systems is expected to grow by 2028 driving the Vietnam Steering market.
  • Integration with Autonomous Vehicles: The Steering market in Vietnam will see significant advancements in integration with autonomous driving technologies. By 2028, new vehicles will be equipped with autonomous driving capabilities, requiring advanced steering systems. This trend will drive the demand for steering systems that support autonomous functionalities.