Vietnam Express reported Audi prefers to participate in more exclusive and luxurious events, Ferry Enders, its CEO for Vietnam, said at the launch of a new showroom in HCMC’s District 7 in March 2024. Lexus expressed it has different business strategies every year, and this year they include not participating in the event. Mercedes has not explained its absence.

Other major brands to not participate are Mini, Kia, Mazda, and Peugeot, all manufactured and distributed in Vietnam by Thaco. VinFast, Nissan and Jeep have also opted out. 

11 companies have confirmed their participation: Ford, GAC, Honda, Isuzu, Mitsubishi, Skoda, Subaru, Suzuki, Toyota, Volkswagen and Volvo. Surprisingly, three motorbike brands, Honda, SYM and Yamaha will also take part.

Last year the Vietnam Motor Show was cancelled due to falling demand for cars in the country. The annual event is usually organised in October to boost sales during the year-end season.

Auto brands have been introducing new models at lower prices than their predecessors to boost demand. South Korea’s Hyundai launched the 2024 MPV Stargazer at prices starting at VND489 million (US$19,210), down 15% from the previous 2022 model.

However, it boasts more advanced technology with wireless charging for smartphones, electronic brakes, forward collision waring, and lane assist. Toyota announced a 4.6% cut in the prices of its 2024 Corolla Cross SUV to VD820 million (US$32,200). It has received many new upgrades in technology and safety systems including a larger entertainment monitor and reverse brake assist.

Germany’s Volkswagen is selling its special edition of the SUV Teramont starting at VND2.5 billion (US$98,200), down 12% from the 2021 version. Mazda, assembled in Vietnam by Thaco, is selling its CX-5 at VND749 million (US$29,400), down 10% from the previous model.

“The key is to claim more market share. Amid a slow market, customers prefer affordable products. Prices determine the number of buyers,”  the manager of a Japanese auto dealership in HCMC said to explain why prices are being lowered.

Other industry insiders said by lowering prices companies are able to reduce their inventories, thus cutting storage costs. Higher sales also mean they are able to pay their bank loans faster. Last year auto sales plummeted by 25% to 369,400 units with most brands suffering double-digit declines. In Q1 2024, the Vietnam Automobile Manufacturers Association posted a decline of 18% to 58,200 units.

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Source: Omdia

This is the longest recorded period of decline since Omdia began tracking the market in 2002. Revenue in Q1 2023 settled at US$120.5B, down 9% from Q4 2022. The semiconductor market is cyclical, and this prolonged decline follows the upsurge as the market grew to record revenues in each quarter between Q4 2020 through Q4 2021 following increased demand from the global pandemic.

The memory and micro processor chips (MPU) market are major areas of the chip market that are contributing to the decline. The MPU market in Q1 2023 was $13.1B, just 65% of its size in Q122 when it was US$20B.

The memory market fared worse, with Q1 2023 coming in at US$19.3B, just 44% of the market in Q1 2022 when it was US$43.6B. The combined MPU and memory markets declined 19% in Q123, dragging the market down to the 9% quarter-over-quarter (QoQ) decline. 

Commenting on the latest Omdia analysis, Cliff Leimbach, Senior Analyst said: “The semiconductor market is plagued by a lack of demand that has continued for multiple quarters and resulted in declining advanced strip processors (ASP) for many components. However, there is demand thanks to generative AI.

NVIDIA has seen strong revenue growth as they lead in this space, reversing the performance of most semiconductor companies to begin 2023, but other semiconductor companies have yet to take advantage of this space in a similar way.”

The decline of the memory market over the last three quarters has rearranged the market share rankings. One year ago, three of the top five companies by revenue were memory companies, Samsung, SK Hynix, and Micron.

Only Samsung remains in the top ten rankings. The last time both SK Hynix and Micron were not in the top ten rankings was in 2008 illustrating the struggles faced by memory-focused semiconductor companies.  

NVIDIA released their financial results after publication of the CLT report, and surpassed estimates on strength of the company’s generative AI chips due to strong demand.

Infineon moved into the top ten this year following an 11% increase QoQ due to its strength in the automotive sector.

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