Chinese Cars Dominate Vietnamese Imports: 87% Market Share — What’s Left for Vietnamese SMEs?

Overview: Chinese Cars Dominate Vietnamese Import Market

June 2026 brought a number that shocked many in Vietnam’s automotive sector: 87% of all imported cars entering Vietnam now come from China. Not 50%, not 60% — nearly 9 out of 10 imported vehicles on Vietnamese roads carry a Made in China label.

In 2023, this figure stood at just 45%. Two years later, China has achieved near-monopoly over Vietnam’s car import stream. Thailand, once the dominant supplier, now holds only 7%. Indonesia, Japan, South Korea — all have been pushed to the margins.

The reason? Simple and brutal: lower prices, comparable technology, and production speed no one can match. A BYD electric SUV costs only 60% of a comparable Japanese or Korean model. Delivery time? 45 days instead of 90. Spare parts? Available in Vietnamese warehouses within 72 hours.

How is the market shifting?

Vietnamese consumers no longer hesitate over Chinese cars like they did 5 years ago. First reason: quality has improved significantly. Second reason: prices align with actual income levels. Third reason: after-sales service is now being invested in much more systematically.

Vietnamese importers have also pivoted. Previously, 70% of distributors focused on Japanese-Korean vehicles. Now, 65% have signed exclusive distribution contracts with at least one Chinese brand. Why? Profit margins are 15-20% higher, inventory turnover is 2-3 times faster.

For electric vehicles, Chinese dominance is even stronger: 94% of EVs imported into Vietnam come from Chinese factories. BYD, GAC, Geely, Changan — these names are now more familiar than Toyota or Honda in the EV segment.

Ho Alva’s Analysis

I’m not surprised by the 87% figure. I’m surprised that many Vietnamese businesses still think they can compete by importing from more expensive, slower, and more difficult sources.

Look at reality: China isn’t just cheap. They’re fast, flexible, and willing to customize for the Vietnamese market. Need additional features for local preferences? They deliver in 2 weeks. Need adjustments in color or interior? They modify the next shipment immediately. Traditional car brands? 6 months just to approve one small change.

Opportunities for Vietnamese SMEs

It sounds contradictory, but this is actually a major opportunity for Vietnamese SMEs — if you know where to position yourself. The opportunity doesn’t lie in competing directly with Chinese cars. It lies in becoming the bridge between Chinese manufacturers and the Vietnamese market.

1. Localized After-Sales Service and Warranty

Chinese cars are selling fast, but the service network remains thin. This is a golden gap. A specialized garage for Chinese EVs, with properly trained technicians and genuine spare parts in stock — this is a completely viable and highly profitable SME model.

I know a small business in Binh Duong that started with 3 technicians and a 200m2 parts warehouse specializing in BYD vehicles. After 8 months, they opened 2 more branches and signed an authorized warranty contract with the manufacturer. Profit margin? 28% — double that of traditional car services.

2. Specialized Parts and Components Distribution

With 87% import market share, demand for replacement parts will surge in the next 2-3 years. But not all parts are worth handling. Focus on high-turnover items: brakes, tires, batteries, filters, LED lights.

A smart SME won’t import indiscriminately. They’ll select the 5-7 best-selling SKUs, negotiate directly with Chinese factories to bypass middlemen, and build B2B distribution channels for small garages. Profit per order may not be huge, but fast turnover — that’s the key.

3. Technical Consulting and Specialized Training

Chinese electric vehicles are completely different from traditional combustion engines. Most Vietnamese mechanics haven’t been properly trained in EV technology, battery systems, control circuits, or energy management software. This is a massive knowledge gap.

If you have solid technical foundation, consider building a training center or specialized technical consulting service. Startup costs aren’t excessive: 1 classroom, 1 demo vehicle, and standard materials. But real demand is growing daily.

Risk Warnings

Don’t think servicing Chinese cars is an easy path. There are 3 major risks you need to mentally prepare for:

Risk 1: Extremely Rapid Technology Changes

Chinese car brands upgrade models on average every 18-24 months. This means parts you import today could become obsolete in 2 years. Without tight inventory management, you’ll be sitting on unsellable stock.

Solution? Only import fast-moving parts, avoid stockpiling too many specialized items. Maintain direct communication channels with factories to stay updated on product roadmaps.

Risk 2: Competition from Official Brands

When market share is large enough, Chinese car brands will build their own service networks. At that point, your advantage — independent garage, parts distribution — may shrink rapidly.

Prevention? Don’t depend on just 1 brand. Diversify your service portfolio, serve at least 3-4 different brands. Build reputation based on service quality, not just low prices.

Risk 3: Unexpected Tax Policies and Import Controls

87% market share from a single country — this number will certainly worry regulators. It’s possible the Vietnamese government will apply balancing measures: increase import taxes, tighten technical standards, or incentivize alternative import sources.

If this happens, the entire price structure and supply chain will change within 3-6 months. SMEs need contingency plans: alternative supply sources, financial buffer for at least 6 months, and ability to pivot quickly to different segments or suppliers.

The question you need to answer yourself: If import taxes on Chinese cars increase 25% next month, will your business model still stand?

Chinese cars at 87% of imports — this isn’t bad news. It’s a signal that the market has chosen. The only question is: Where will you position yourself in this new value chain?