Due to rapid urbanization and growth of passenger vehicle sales, Vietnam Automotive Aftermarket Service Industry is expected to grow at a CAGR of ~8.4% between 2020 and 2025: Ken Research
GURUGRAM, India, Jan. 17, 2022 /PRNewswire/ --
- Increased awareness on health and hygiene in the post COVID-19 scenario has acted as a catalyst for the demand of private vehicles, which contributes to the aftermarket services industry.
- Rapid urbanization couple with fast growing middle class section is another major growth driver in the market as it has led to higher disposable income and in turn shift in preference from two wheelers to four wheelers.
- Low localization rate and increased dependency on imports for components and spare parts acts as a challenge in the aftermarket industry
Increasing Car Ownership and Reduction of Import Tax: Vietnamese government has proposed various regulations since FY'18 to improve the ecosystem of the automotive industry and making it to convenient for the consumers to purchase private vehicles by reducing the import tax to 0% for cars imported from ASEAN region, which brings down the price of the final product. Government initiatives to strengthen Vietnam's road infrastructure along with the increased awareness on health and hygiene brought about by the advent of COVID-19 is expected to increase the prospect of vehicle ownership in the future. There has been a gradual surge in vehicle parcs in recent times, expanding at a CAGR of ~25.7% in between FY'15 and FY'20. Growth of car ownership in Vietnam stood at ~10.5% in FY'20, which was comparatively higher than its South East Asian counterparts. Increasing car ownership acts as catalyst for the aftermarket services industry which is expected to grow at a significant rate in coming years.
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Rapid Urbanization and Fast Growing Middle Class: Rapid urbanization over the years is contributing to the growth of automotive market in Vietnam, as more and more consumers are migrating to urban cities. It is estimated that in FY'20, the urbanization rate stood at ~37.3% of its overall population compared to ~36.6% rate in FY'19. Urbanization serves as one of the growth drivers for the aftermarket service industry as consumers migrate for better payment opportunity in the cities, it allows them to have the financial means to avail private transport thereby increasing the prospect of aftermarket services. To curb excessive traffic jams in the cities, Hanoi, a major city in the Northern Region of Vietnam has proposed to ban motorcycles by 2030, thereby enhancing the opportunity of passenger vehicle sales for the country's fast growing middle class in coming years.
Enhancing Online Ecosystem: Aftermarket service companies in Vietnam has not been able to adapt to the growing significance of the online ecosystem over the years. However, the advent of COVID-19 has changed the perception of consumers towards the utilization of online space. More consumers are utilizing digital medium for buying and selling products as well as booking services through online medium. Similarly, there exist a shift in aftermarket service industry wherein consumers are preferring to book slots for their vehicle services online. Therefore, the automotive aftermarket service and spare parts companies are expanding their presence in the online space for better visibility among consumers and compete on the basis of brand integration. Servicing companies have initiated the process of online booking to enhance customer's convenience. This also helps the servicing companies to maintain COVID protocols such as curb in overcrowding in public places as set by the Vietnamese government.
Increased Awareness on Health and Hygiene: With the advent of COVID-19, consumers were witnessed to be more concerned on maintaining personal health and hygiene. Therefore they are preferring the option of private transportation rather than availing public transport system. The change in consumer's behavior and preference is expected to act as an opportunity for the automotive aftermarket service industry in Vietnam. As more and more consumers prefer availing private transportation medium, the demand for new cars would surge in the coming years. With the surge in the vehicle parc, consumers would also require to periodically maintain their vehicle every 18 months as prescribed by the government of Vietnam, thereby the demand for aftermarket services would enhance. Therefore the future prospect of the industry looks strong wherein OEM and multi brand workshops in the market could utilize this opportunity to integrate the domain.
Integration of Electric Vehicles: In order to curb the rising impact of climate change, governments all over the world have pledged to reach zero net carbon emissions by 2050. Hence, there is a greater deliberation of replacing fuel operated vehicles with electric vehicles (EVs) to minimise pollution. "National Automobile Development Strategy by 2025" adopted by the Vietnamese government aims to stimulate manufacturing and increase the volume of use of EVs in the coming years. With the integration of EVs in the market, vehicle service companies will have to update their equipment's and train their mechanics for servicing electric cars which would require huge investment by these companies thus, impacting their business financials. Unorganized workshops will face challenge in servicing EVs as they operate on lower budget than required to cater to the demand of EV ecosystem.
Lack of Technological Adoption and Dependence on Imports: Domestic automotive and aftermarket services industry has not been able to invest in core and high end technology products such as transmission system. Localized parts required for vehicle servicing and production are mostly of low technology products such as tires, mirrors, glasses, batteries and plastic products. Therefore, aftermarket services industry in Vietnam remains largely dependent on imported components and spare parts, which increases their cost of operating their business.
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" by Ken Research suggested that the automotive aftermarket service industry in Vietnam is expected to grow further in the near future, with the surge in vehicle parc due to increased awareness on health and hygiene followed by the aftermath of COVID-19, thus showcasing a change in consumer preference from availing public transport to private transportation medium. As more consumers shift from availing motorbikes which has historically been the dominant form of transportation in Vietnam to availing four wheeler vehicles, the demand for aftermarket services would increase in coming years. Rapid urbanization coupled with fast growing middle class would act as major growth drivers for the aftermarket service industry in Vietnam. The market is expected to register a positive CAGR of 8% in terms of revenue during the forecast period of FY'20-FY'25E.
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
For More Information on the research report, refer to below link:-
Vietnam Automotive Aftermarket Service Market
Related Reports:-
Indonesia's automotive aftermarket service industry revenue stood at USD ~ billion in 2021 and recorded a CAGR of 5.4% during 2015-2021. The multi-brand workshops dominate the Indonesian automotive aftermarket service industry due to their cheaper service fee and generalized service offerings. ~% of the after-sales care service market is captured by the multi-brand service centers owing to its low service & spare parts cost and high preference by post warranty car owners. OEM car service centers in Indonesia witness the majority of the pre-warranty cars visiting their centers. High-quality service, genuine spare parts and more reliability on the OEM service centers are other reasons why a customer prefers the OEM service centers in Indonesia.
Malaysia automotive aftermarket service industry revenue stood at USD ~ Bn in 2020 and recorded a CAGR of 2.9% during 2015-2020. Multi-brand car service centers are majorly preferred by the users with out-of-warranty cars. Lower cost of multi-brand service centers & Availability of quality spares from reputed suppliers is leading to the growth of multi-brand car service centers in Malaysia. OEM car service centers in Malaysia witness the majority of the pre-warranty cars visiting their centers. High-quality service, genuine spare parts, and more reliability of the OEM service centers are other reasons why a customer prefers the OEM service centers in Malaysia.
The report also covers the trade scenario, trends and developments, issues and challenges, SWOT analysis, regulatory landscape, end user analysis, value chain analysis, PESTLE analysis, COVID-19 impact on automotive & spare parts transportation industry, decision making process, snapshot on control tower market, snapshot on pre-delivery inspection market, COVID-19 impact on automotive & spare parts warehousing industry, technological advancements & innovations, comparative landscape including cross comparison of major players operating in KSA automotive & spare parts logistics market and cross comparison of major players operating in KSA automotive market. The report concludes with future market projections on the basis of overall logistics and automotive & spare parts logistics revenue, by service mix and analyst recommendations highlighting the major opportunities and cautions.
Covid-19 pandemic has drastically affected the supply chain in automotive sector and dampened the consumer spending in these countries, resulting in reduced sales. The growth over the years in these countries has been gradual. In Bhutan, the CAGR over the years has been positive which expounds the expansion of automotive sector in the country. Although, government in Bhutan is trying to discourage the use of private vehicles in order to meet its sustainability goals and preserve the rich environment of country by increasing the taxes. Whereas, in Bangladesh government has heavily incentivized the sector by reducing taxes; the result has been a healthy growth of the sector.
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