It will begin by recalling C200, C250, C300, E200, E250, and E300 models from July 25 and replace faulty components.
Daimler AG Group, which owns the Mercedes-Benz brand, discovered the error that caused the steering wheel to become tighter than normal.
It also discovered that the gear box in some C-Class and E-Class cars is receiving inaccurate measurement signals. The steering software could deactivate the power steering system upon receiving these erroneous signals, the company said.
The affected models are imported in completely knocked down (CKD) condition and assembled at the Mercedes Benz factory in Ho Chi Minh City.
Last year the firm had recalled 4,802 SUVs over faulty seatbelts.
According to the Vietnam Automobile Manufacturers Association, Mercedes-Benz sold 1,434 units in the first five month of this year, down 33 percent year-on-year and accounting for a 1.2 percent share of the country's auto market.