Hyundai Motor Co., South Korea’s biggest automaker, is on track to reclaim its leadership in Vietnam’s automobile market, fending off competition from Japanese and American carmakers.

According to the Vietnam Automobile Manufacturers’ Association (VAMA) and industry sources on Wednesday, Hyundai Motor sold 22,903 units in Vietnam in the first five months of this year. It ranks first locally, ahead of Japan’s Toyota Motor Corp. Ford Motor Co. of the U.S. is third, followed by another Korean brand Kia Corp.

Hyundai Motor began car production in Vietnam in 2017 when it established HTMV, a production joint venture with Thanh Cong Group in Ninh Binh Province. Within two years of HTMV’s launch, Hyundai Motor became the No. 1 automaker in the country for three consecutive years from 2019 to 2021, overtaking Toyota. Last year, Hyundai Motor broke its all-time sales record, but lost ground to Toyota in the rankings.

This year, however, the Korean top auto brand is aiming to regain the throne with popular models such as the Accent, Creta and Santa Fe in the market.

Hyundai Motor also plans to launch more new sport utility vehicles (SUVs) and multipurpose vehicles (MPVs) in the future and will locally produce its electric vehicle, the Ioniq 5, starting next month. Hyundai Motor built HTMV Plant 2 late last year, expanding its annual production capacity to 107,000 units.

KIa is also growing its presence in Vietnam, ranking third in sales last year. It surprised the industry with a 30 percent surge in sales in 2020, when overall market demand plummeted due to the pandemic. Kia’s flagship models include the Sonnet, Carnival, Sportage and Seltos.

Vietnam’s auto market is the fourth largest in Southeast Asia after Thailand, Indonesia and Malaysia. Overall sales in the first five months of this year were down 35.7 percent from a year ago to 113,527 units. However, with the Vietnamese government’s recent approval of a 50 percent reduction in registration taxes, there are signs of pent-up demand that has been stifled by high auto loan rates. The reduction will take effect from next month through the end of the year.

Multinational automakers have also changed their outlook on Vietnam, with BMW announcing late last year that it will partner with a local manufacturer for outsourced production, and Ford investing in an assembly plant to increase its annual production from 14,000 to 40,000 vehicles.

By Lee Yu-sup and Minu Kim

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