Hanoi (VNA) – Vietnam now has a goldenpopulation structure and a fast growing middle class – potential buyers ofprivate cars, which is forecast to boost domestic car sales by about 22 percentannually from now to 2025.

The auto market of Vietnam boasts hugedevelopment potential from now to 2025, said Le Huy Khoi, who is in charge ofthe market research and forecast division of the Industrial Policy and StrategyInstitute (IPSI).

According to Khoi, the domestic automanufacturing industry will grow by about 18.5 percent annually between 2018and 2025 and 13.8 percent between 2025 and 2035, raising the car output tonearly 531,600 units by 2025 and 1.76 million units in 2035.

With the growing middle class, car sales are setto respectively rise by 22.6 percent each year from now to 2025 and 18.5percent in the following years.

Meanwhile, local demand is forecast at about500,000 – 600,000 units by 2020, Khoi said, adding that an automobilizationtrend will appear when per capita income surpasses 3,000 USD. The car marketcould reach 750,000 – 800,000 units by 2025 and 1.7 – 1.85 million units by2035.

He noted those forecasts were based on thepopulation scale, average per capita income and the average number of cars per1,000 people.

Accordingly, Vietnam’s population was estimatedat over 96 million at the end of 2017. This figure is expected to rise to 98.2million by 2020, 101.1 million by 2025 and 107.8 million by 2035.

Per capita GDP in the country was 53.5 millionVND (2,385 USD) in 2017, which will increase 6.8 percent annually to 7,780 USDby 2035. More than half of Vietnam’s population will enter the global middleclass by 2035 with average daily spending of at least 15 USD.

Statistics of London-based BMI Research showthat Vietnam has the lowest car ownership rate in the region, with only 4 – 5percent of the families owning cars.

The country is emerging as the world’s mostpotential auto market when its car ownership is just about 23 units per 1,000people, compared to 204 units in Thailand and at least 400 units in developedcountries, especially the US (790 units per 1,000 people).

The ASEAN Auto Purchase Index of FinancialTimes also indicated an a increase in the number of Vietnamese intending to buycars over the last five years — gradually gaining on those in Indonesia,Thailand and Malaysia.

The average proportion of urban consumers whointended to buy a car in Vietnam increased from 11 percent in 2013 to 15 percentin 2016 and 2017. This is lower than the average of 25 percent in ASEAN’s urbanareas, but it’s still the biggest rise among the five ASEAN countries ofIndonesia, Malaysia, the Philippines, Thailand and Vietnam.

Do Huu Hao, Chairman of the Vietnam Society ofAutomotive Engineers, said although the import tariff on completely built upcars was reduced to zero percent, some Vietnamese businesses like Truong HaiAutomobile Co. Ltd (THACO), Thanh Cong Group, and Vingroup still plan to expandcar assembly and production activities, which shows the considerable potentialof the auto market.

The projects of these firms aim to raise therate of domestically made components in their cars to 40 percent or higher toserve not only the domestic market but also export Vietnamese automobiles toother ASEAN countries in the near future, he noted.-VNA