Auto parts market set to boom as vehicle population ages

Passenger cars usually have a warranty period of three to five years, and need a major overhaul after six to seven years of running.

With cars aged nearly 6 years, the demand for components and parts for maintenance, repair and replacement purposes will increase sharply in the near future.

At an auto parts show in Ho Chi Minh City in late June, Teoh Chee How, head of the Asia Pacific aftermarket division at ZF Aftermarket, a German seller of components and systems for cars, said: "In the next five years the number of new cars on the road will increase by 10%."

"The average age of vehicles is near the time of overhaul," How said. "That is why we consider Vietnam to be a very promising auto parts market and well worth investment."

According to research by ZF Aftermarket, the total number of passenger cars in circulation in Vietnam is 2.5 million, and their average age is 5.7 years, compared with 12.5 years in the U.S. and 12 years in Europe.

Markus Wittig, head of business line passenger cars at ZF Aftermarket, said the biggest challenge facing the Vietnamese auto parts market is the lack of in-depth, methodical support and diagnostic tools for workers at independent repair centers.

The country’s annual automobile production capacity is 755,000, with foreign-owned plants manufacturing for 35% of them, according to the Ministry of Industry and Trade.

Imports of components for production and repair are worth around US$5 billion a year.