Sales of low-cost cars are up sharply as the motorbike market reaches saturation point.
More and more people can afford to buy cars
The Ministry of Industry and Trade said motorbike sales reached 2.1 million in the first nine months of the year, down 11.3% on a year earlier, with car sales at 138,800, up 55.3% year-on-year.
Motorbike dealers say sales have declined to January 2012 levels.
The Vietnam Association of Motorcycle Manufacturers (VAMM) said the market is reaching saturation point, with 43 million motorbikes on the road in 2014.
More and more people can afford to buy cars and more manufacturers are rolling out low-cost cars. The Vietnam Automobile Manufacturers' Association (VAMA) said sales of low-cost cars will increase, especially in 2016 as the economy maintains its recovery track and affluence grows.
Vietnam is trying to build a domestic auto industry by increasing the special consumption tax on imported cars, and low-cost cars with smaller engines attract the lowest excise.
Cars with displacement of over 2.0 litres will have tax rates increased by 10-15%, to 60% to more than 75%, depending on the engine. Cars with engine displacement of less than 1.5 litre will have the tax lowered from 45% to 20% in 2018.