Vietnam Driveline Market Report Size Share Growth Drivers Trends Opportunities & Forecast 2025–2030

Vietnam Driveline Market Overview

• The Vietnam Driveline Market is valued at USD 930 million, based on a five-year historical analysis. This growth is primarily driven by the increasing demand for vehicles, advancements in automotive technology, a shift towards more efficient driveline systems, rapid expansion in domestic manufacturing, and rising adoption of electric two-wheelers. The market has seen a surge in both passenger and commercial vehicle sales, reflecting the country's expanding economy and urbanization trends.
• Key cities such as Ho Chi Minh City and Hanoi dominate the market due to their high population density and economic activity. These urban centers are hubs for automotive manufacturing and sales, attracting both domestic and international players. The growing middle class in these regions is also contributing to the rising demand for personal and commercial vehicles.
• The Decision No. 876/QD-TTg, 2022 issued by the Prime Minister of Vietnam approves the National Strategy on Green Growth for the period 2021-2030, with vision to 2050, requiring electric vehicle manufacturers to meet localization rates of at least 20% by 2025 and 40% by 2030, while providing tax incentives and subsidies for compliant production and consumer adoption to promote sustainable transportation solutions.

Vietnam Driveline Market Segmentation

By Type:The driveline market can be segmented into various types, including Manual Transmission, Automatic Transmission, Hybrid Driveline Systems, Electric Driveline Systems, and Others. Among these, Automatic Transmission is gaining significant traction due to its ease of use and increasing consumer preference for convenience in driving. The demand for Electric Driveline Systems is also on the rise, driven by the government's push for electric vehicles and sustainability.

By End-User:The market is also segmented by end-user applications, including Passenger Vehicles, Commercial Vehicles, Two-Wheelers, and Others. The Passenger Vehicles segment is the largest, driven by the increasing purchasing power of consumers and the growing trend of personal vehicle ownership. Commercial Vehicles are also significant, supported by the expansion of logistics and transportation services in urban areas.

Vietnam Driveline Market Competitive Landscape

The Vietnam Driveline Market is characterized by a dynamic mix of regional and international players. Leading participants such as Thaco Group, SAMCO, VinFast, Toyota Motor Vietnam, Honda Vietnam, Ford Vietnam, Mitsubishi Motors Vietnam, Isuzu Vietnam, Hino Motors Vietnam, Nissan Vietnam, Hyundai Thanh Cong, Mercedes-Benz Vietnam, Piaggio Vietnam, Suzuki Vietnam, Kia Motors Vietnam contribute to innovation, geographic expansion, and service delivery in this space.

Vietnam Driveline Market Industry Analysis

Growth Drivers

• Increasing Demand for Fuel-Efficient Vehicles:The Vietnamese automotive market is witnessing a significant shift towards fuel-efficient vehicles, driven by rising fuel prices and environmental concerns. In future, the average fuel price in Vietnam reached approximately 27,000 VND per liter, prompting consumers to seek vehicles that offer better mileage. The government’s target to reduce fuel consumption by 20% by future further supports this trend, indicating a robust market for driveline technologies that enhance fuel efficiency.
• Expansion of Automotive Manufacturing:Vietnam's automotive manufacturing sector is projected to grow, with over 550,000 vehicles produced in future, a 10% increase from the previous year. This growth is fueled by foreign investments, with companies like Toyota and Honda expanding their production facilities. The government aims to increase local content in vehicles to 40% by future, creating a favorable environment for driveline component manufacturers to thrive and innovate within the local market.
• Government Initiatives for Electric Vehicles:The Vietnamese government has set ambitious goals for electric vehicle (EV) adoption, targeting 1 million EVs on the road by future. In future, the government allocated 1.2 trillion VND to support EV infrastructure development, including charging stations. This initiative is expected to stimulate demand for advanced driveline systems tailored for electric and hybrid vehicles, positioning Vietnam as a competitive player in the EV market in Southeast Asia.

Market Challenges

• Intense Competition Among Local and International Players:The Vietnamese driveline market is characterized by fierce competition, with over 35 local and international manufacturers vying for market share. In future, the market saw a 15% increase in new entrants, intensifying price wars and innovation races. This competitive landscape poses challenges for existing players to maintain profitability while investing in research and development to keep pace with technological advancements.
• Regulatory Compliance and Standards:Navigating the complex regulatory environment in Vietnam presents significant challenges for driveline manufacturers. In future, the government introduced new emission standards that require compliance by future, necessitating substantial investments in technology upgrades. Failure to meet these standards could result in penalties and loss of market access, compelling manufacturers to adapt quickly to evolving regulations while managing operational costs effectively.

Vietnam Driveline Market Future Outlook

The Vietnam driveline market is poised for transformative growth, driven by technological advancements and a shift towards sustainable solutions. As the government continues to promote electric vehicles and infrastructure development, manufacturers are likely to invest in innovative driveline technologies. Additionally, the increasing focus on automation and lightweight materials will enhance production efficiency and product performance. These trends indicate a dynamic market landscape, where adaptability and strategic partnerships will be crucial for success in the coming years.

Market Opportunities

• Growth in Electric and Hybrid Vehicle Segments:The rising consumer interest in electric and hybrid vehicles presents a lucrative opportunity for driveline manufacturers. With the government’s commitment to EV incentives, the market for electric driveline components is expected to expand significantly, potentially reaching 220,000 units by future, creating a demand for innovative technologies and solutions.
• Investment in Infrastructure Development:Vietnam's ongoing investment in transportation infrastructure, projected at 2.5 trillion VND by future, will enhance the automotive ecosystem. This investment will facilitate the growth of driveline manufacturers by improving supply chain logistics and access to markets, ultimately driving demand for advanced driveline systems that meet evolving consumer needs.