Chinese Automakers Dominate Vietnam’s Vehicle Imports as Competition Drives Local Manufacturing Shift

Vietnam sees Chinese car imports surge in 2026, but CKD there makes sense for these ‘new’ players.

Vehicle imports from China into Vietnam reached approximately US$ 1.26 billion in the first half of 2026, establishing China as the country’s leading source of imported automobiles by value. According to an industry report published by Vietnam News and VietnamPlus, based on official trade figures from the Department of Customs under the Ministry of Finance, the influx of Chinese vehicles is rapidly reshaping domestic automotive competition, pricing structures, and long-term manufacturing strategies.

The rising volume reflects aggressive expansion across high-demand segments. Chinese automotive brands have introduced an extensive lineup of SUVs, MPVs, and electrified vehicles—spanning both battery electric vehicles (BEVs) and plug-in hybrids (PHEVs)—offering high levels of standard equipment and digital features at price points traditionally commanded by mainstream Japanese and South Korean internal combustion engine (ICE) models.

Intensifying Showroom Pricing Pressure

The rapid market penetration of competitively priced Chinese models has triggered major promotional campaigns from established legacy automakers attempting to defend market share:

• Hyundai Thanh Cong: Rolled out substantial cash discounts of up to VND 220 million (approximately US$ 8,430) on selected passenger models.
• Toyota Vietnam: Introduced comprehensive registration fee support and fee waivers across key volume sellers.
• Ford Vietnam: Extended factory warranty programs and added promotional service coverage.

While discounting is a common sales tactic in the automotive sector, the speed and scale of feature-packed Chinese offerings have intensified market-wide price compression across both entry-level and mid-tier vehicle segments.

The Pivot to Local CKD Assembly in Vietnam

To reduce cross-border logistics overheads, bypass tariff barriers, and secure greater supply chain stability, several major Chinese automotive groups are shifting from pure Completely Built-Up (CBU) imports to local Completely Knocked-Down (CKD) assembly plants:

• Chery (Omoda & Jaecoo): Preparing to start vehicle production at its new manufacturing facility in northern Hung Yen Province. Initial production capacity is planned between 30,000 and 60,000 vehicles annually, with the potential to scale to 200,000 units per year by 2030 under a total projected investment of US$ 800 million.
• Geely Auto & Tasco Joint Venture: Investing roughly US$ 168 million to construct a 30-hectare CKD assembly plant at the Tien Hai Industrial Park in Hung Yen Province. The facility will have an initial phase-one capacity of 75,000 vehicles per year to assemble Geely and Lynk & Co models, alongside a dedicated regional research and development (R&D) centre.
• SAIC Motor (MG Brand): In active discussions with domestic partners to establish local assembly lines in Vietnam, targeting operational launch in late 2027.

Supply Chain Realities: Beyond Assembly Capacity

The rapid expansion of localized assembly lines presents both opportunities and structural challenges for Vietnam’s broader automotive ecosystem.

Bui Quoc Huy, deputy head of the Automotive Engineering Department at Phu Tho College of Agricultural Mechanics, highlighted that Chinese manufacturers are challenging the market through the rapid pace of technological innovation and feature integration. While this dynamic provides consumers with greater variety and pushes domestic businesses to enhance service standards, expanding assembly capacity alone does not guarantee a resilient local supply chain.

As the industry transitions toward electric and hybrid drivetrains, core high-value components—including lithium battery packs, traction motors, power electronics, and autonomous driving software—remain heavily centralized outside Vietnam.

Industry analysts emphasize that for Vietnam to capture sustainable value from incoming foreign direct investment (FDI), government policy must evolve. Shifting toward performance-based tax incentives—such as structured VAT reductions and corporate income tax relief linked directly to local parts localization, domestic supplier development, technology transfer, and local R&D investment—will be critical in transforming Vietnam from a final assembly site into a high-value automotive manufacturing hub.