When the economy is developing, the automotive market is increasingly getting more attention. To meet the needs of the development, in recent years, Vietnam has repeatedly changed its policy for the automotive market, and no less than 10 times the policy has been modified. However, in most of them, the changes do not bring the desired effect; they even create unstability for this market.
Skyrocketing taxes and fees
The variation of the automotive market in terms of the macro can be calculated from 2002, it is time that the Ministry of Finance, Ministry of Industry and Trade and the Ministry of Transport came together to discuss and make recommendations on the change of import duty and registration fee for the domestic automotive market. By 2004, the strong growth of the automobile market while transport infrastructure is not met made the Ministry of Finance once again change the policy by raising the excise tax from 5 percent to 24 percent. By 2005, this tax once again was increased to 40 percent, and in 2006 was 50 percent. Also since then the taxes, registration fees such as import duty ... continuously were modified up and down, down and then up again.
Policy "arising" after the changes of the market is one of the "risks" for the current automotive business. This is shown most clearly after the Ministry of Industry and Trade’s Circular 20 issued in 2011 to secure imported automobiles. Accordingly, the automotive business enterprises who want to import automobiles are required
to have written designation or authorization of the genuine feedback or importer. This provision has led to a series of previous car import business reeling because their customers had paid deposit but not yet received cars or because of the signed contract. This has caused many businesses out from the market.
Looking at the chart of automobile market in the next few years, we can see clearly that the up and down swings of the automotive market mainly come from the rapid policy changes from the policy makers.
Market "hot" or "freeze" is the result of tax policies such as increased motor vehicle registration fees or charges to limit the transport ...
General Department of Customs in September, proposed amendments to Circular 20 in the direction of taking off assigned paper or authorized paper from genuine importer or distributor for businesses to import vehicles on the grounds that increasing budget revenues, limit monopoly and avoid circumvent the law in importing cars. And recently, the General Department of Customs adjusted and added new tax rates for hundreds of imported cars, of which there are many luxury cars like Audi, BMW, Lexus having higher prices from US$ 8,000 - US$22,000 / car compared to the old price.
Will automobile become the key industry?
According to the latest report of the Vietnam Automobile Manufacturers’ Association (VAMA), sales in September / 2012 increased by 9 percent, reaching 7669 vehicles, but according to majority of car businesses, in today circumstances, by the end of the year, the market will only consume less than 95,000 vehicles. This figure is still modest compared to the forecast of 180,000 vehicles given from the beginning of the year.
According VAMA statistics, in the first nine months, sales were down 38 percent compared to the same period last year.
According to Laurent Charpentier, VAMA chairman said: "No other country has such tremendous decline because of the rumors about the new tax policy. Even Greece fell 20 percent in the state of economic crisis.
Unpredictable and changeable market is high pressure for us. “This demonstrates clearly that the impact of the policy has affected the development of Vietnam's automobile market.
The impact of these mechanisms and policies to the automobile market is not small. And if the policy always goes after the development of the market, participating in the market remains a risk for automotive business, making our aim to bring the car back into key industry very difficult to implement. According to Michael Behrens, president and CEO of Mercedes-bez Vietnam said at a recent conference: "The annual tax rate and fee changes make businesses struggle to implement that and it affects the designed plans. In my opinion, there should be a long-term policy for the short-term adjustment ".
For a long time, the Vietnamese automotive industry has always been expected to be one of the key industries.
But the policy of ever-changing tax and fee has been a drag on the growth of this market. According to Mr Do Huu Hao, former Deputy Minister of Trade and Industry, Chairman of the Vietnam Society of Automotive Engineers, said: "In the future, the Vietnamese population will increase and the traffic conditions will be improved, so the need to use car will be higher. In order to encourage the automotive industry development, it’s necessary to have appropriate policies. "
Si Son
Vietnamese
