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The Hanoitimes - With the Covid-19 impacts still looming on local economy, domestic car prices have gone down but remained nearly double the prices of vehicles sold in Thailand and Indonesia, mainly due to high fees and taxes for locally made cars. Rising domestic production capacity and existing government’s support policies to cut fees and taxes for locally made cars are expected to be major factors dragging down car prices in Vietnam in the coming time. Car production at Hyundai Thanh Cong manufacturing plant. Photo: Hoang Giang A representative from the Truong Hai Auto Corporation (Thaco), one of Vietnam’s leading car manufacturers, expected the country’s participation in free trade agreements (FTAs) with major partners, including the EU, Japan, UK and South Korea, would help further abate costs for importing car parts with import duty at 0%. With the Covid-19 impacts still looming on local economy, domestic car prices have gone down but remain nearly double the prices of vehicles sold in Thailand and Indonesia, mainly due to high fees and taxes for locally made cars. “High product quality and low base cost are essential for Vietnam cars to compete with their foreign peers,” said auto expert Nguyen Minh Dong, adding only a bigger market size could attract more investors to come in to produce cars in the country and enhance localization rate. Director of Hien Toyota noted while car manufacturers can streamline operation to drive down the production cost, taxes and fees are dependent on state policies. “Lowering taxes and fees for cars will no doubt reduce prices and bring more benefits for customers,” she said. Booming market demand A recent report from the SSI Securities Corporation suggested Vietnam’s income per capita is on the rise and set to grow at an average of 8-10% in the next decade. “Compared to regional countries, the current income per capita is fast approaching to a point of bursting demand for cars,” …

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Vietnam aims to obtain a GDP growth rate of 6.5 percent this year and average income per capita of $3,700. With rising incomes, car sales are expected to boom. One report said that 420,000 cars of different kinds were sold in 2020, including 400,000 cars with 16 seats or less, the same as 2019. Vietnam’s car market did not grow in 2020, but did not decrease by 15 percent as previously predicted by VAMA. Car sales dropped sharply in the first half of 2020 when the Covid-19 pandemic broke out. However, the sales went better in the last months of the year thanks to effective control of the pandemic, a 50 percent vehicle registration tax reduction policy, and car price decreases. While some enterprises reported minus growth rates, others still had positive growth rates. VinFast, a newcomer, with 30,000 cars sold in 2020, has successfully taken away market share once held by other manufacturers. SSI has estimated that the automobile market will see a growth rate of 16.3 percent in 2021 as car demand continues to be high. The figure may be 3 percent higher if the Covid-19 pandemic is contained. According to Vietnam Register (VR), there are 34 cars per 1,000 people in Vietnam. The figure is relatively low compared with other regional countries and the world. With average income increasing, cars will turn from a luxury good to a more common consumer good and the market size will increase, offering an opportunity to develop the automobile industry. According to Vietnam Register (VR), there are 34 cars per 1,000 people in Vietnam. The figure is relatively low compared with other regional countries and the world. Businesses believe that B-class sedans will serve as the mainstay to promote the development of the industry. The sales of B-class sedans lead the market with more than 60,000 cars sold in 2020. Despite difficulties caused by Covid-19 in 2020, the market segment still obtained growth. Toyota Vietnam reported that 30,000 Vios were …

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The Hanoitimes - A 50% reduction in the registration fee for domestically-produced cars is seen as discriminatory treatment against imported ones. Vietnam's Ministry of Finance (MoF) has advised the government to not consider extending the 50% reduction in the registration fee for domestically-produced cars beyond its current validity which expires this year-end. Cars production at Huyndai Thanh Cong. Photo: Hoang Giang. Prime Minister Nguyen Xuan Phuc in May agreed to slash the registration fee, which accounts for up to 12% of the car price, helping customers save thousands of dollars and boosting sales of domestic cars. The MoF estimated state budget revenue would be reduced by VND3.7 trillion (US$160.2 million) as a result of the move. According to the MoF, a cut in the registration fee for domestic cars is seen as a short-term solution to support local cars manufacturers and assemblers who are severely affected by the Covid-19 pandemic. However, during the implementation process, embassies of some countries, including Thailand, Indonesia, and the European Chamber of Commerce (EuroCham), expressed concern that such a reduction shows discriminatory treatment against imported cars. Under the current legislation, registration fees for passenger cars, or cars with less than nine seats, in eight provinces and cities (Hanoi, Quang Ninh, Hai Phong, Lao Cai, Cao Bang, Lang Son, Son La, and Can Tho) are 12% of the car price, while the rate is 11% in Ha Tinh, and 10% in Ho Chi Minh City, Danang and elsewhere. For a pickup truck, the fee is at 7.2% for the group of the above-mentioned eight cities and provinces, 6.6% for Ha Tinh, and 6% for other localities. In case of a Toyota Fortuner with a price tag of VND1.35 billion (US$57,820), a customer would have to pay a registration fee of VND162.4 million (US$6,955), but now the amount is cut by 50% to VND81.2 million (US$3,478) if the car is made in Vietnam. Car sales in Vietnam in the …

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