Vietnam is South Korean carmakers’ ‘gold mine’ in Southeast Asia

The other five markets are Indonesia, Malaysia, Thailand, the Philippines and Singapore.

Vietnam is the only market in the region where South Korean auto brands compete successfully with Japanese and local brands, and their market share elsewhere is minimal, according to multinational market research firm PwC.

In Indonesia, the region’s most populated market, Hyundai sold 22,343 vehicles last year to rank eighth with a market share of around 2.5%. Kia did not make it into the top 15.

Their sales in the Philippines were 12,019 and 6,692 units, which gave them both a market share in the low single digits. In Singapore too the story was the same with sales of 2,061 and 1,214 units. Neither brand ranked among the top 10 in Thailand and Malaysia.

Meanwhile, in Vietnam Hyundai sold 67,168 vehicles and had the second largest market share of 13.6% behind local player Vinfast with over 87,000 units. Kia took the sixth spot with 34,570 units and a 7% share.

The rest of the top five comprised Japan’s Toyota with 66,576 vehicles, the U.S.’s Ford with 42,175, and Mitsubishi, another Japanese brand, with 41,198.

Experts attribute the two South Korean brands’ success in Vietnam to their partnership with local firms Thanh Cong Group and Truong Hai (Thaco Group), who provide insights into local consumer habits.

They and their partners built factories in the country to indigenize vehicle production and make their prices competitive, and frequently update designs and features to suit consumers’ preferences.

A former head of strategic planning at a member of the Vietnam Automobile Manufacturers Association said: "Instead of making efforts to compete in Thailand, Indonesia and Malaysia, where Japanese and local cars were already dominating the market, South Korean carmakers chose to invest in Vietnam because it is a developing market with open-minded consumers and a population heavily influenced by Korean culture.

"Their parent companies also want to establish a presence in Vietnam to later expand their influence."

According to this expert, Japanese brands entered Southeast Asia much earlier and established production bases in key markets with large populations and strong economies.

As a result, they have always been the preferred choice of consumers in the region.

Potential shift in the market

In Southeast Asia, Chinese brands’ market share rose from 3.4% to 5% last year, causing those of Japanese and South Korean carmakers to drop 4.3 and 0.3 percentage points to 63.9% and 5%.

Chinese firms entered the Indonesian and Thai markets with affordable and fully electric vehicles, and used them as bases to quickly expand in the region.

Vietnam, with its low car ownership rate and a rising number of young car buyers, remains a "gold mine" for South Korean automakers.

Nevertheless, their market shares may come under threat as Japanese and local brands step up their game.

Hyundai and Kia’s combined sales in Vietnam fell by 6% in 2024 as their key models failed to compete with Japanese rivals in several segments.

The Accent, Hyundai’s best-selling model with sales of 13,538 units last year, trailed Toyota’s Vios, which sold 14,210 units. VinFast’s compact high-clearance electric models are also growing in popularity.

All of Kia’s vehicles and Hyundai’s passenger cars, excluding the Stargazer, sold in Vietnam are locally made.

Hyundai has two factories in Vietnam while Kia has one, which is also its largest in the region with a capacity of 50,000 units per year.