Retail prices of automobiles in Vietnam will surely fall in the coming time, said Deputy Minister of Industry Do Huu Hao, following Toyota Vietnam’s announcement of reducing prices for several popular models in the country.
“Those still intending to increasing car prices will put their heads in the noose,” Hao said, adding that Vietnamese consumers now are more aware of market movements, not bearing pressures from advertisements of carmakers.
Previously, all foreign-led carmakers operating in Vietnam announced that car prices will increase due to a 10 per cent special consumption tax (SCT) rise to 50 per cent imposed on locally assembled sedans in spite of severer competition from imported cars which enjoy a 30 per cent SCT cut and 10 per cent import tax reduction to 50 per cent and 90 per cent, respectively.
Hao said tax cuts on imported cars are conditions for Vietnam’s entry to the World Trade Organization (WTO) from influencing partners like the United States and Japan, which wanted Vietnam to reduce import tariffs on imported used and new cars to 60 per cent.
To warn carmakers about their pricing policies, the deputy minister said Vietnam may accept requirements for car import tax cuts in the WTO negotiations but in a specific itinerary.
Furthermore, domestic automakers are building factories to make sedans, a key product of most foreign-led carmakers here, Hao said.
Tu Van Hung, deputy general director of Vinamotor, one of the largest domestic auto assemblers in Vietnam, said his corporation will roll off first sedans by the end of this year.
In addition, many Chinese companies are surveying the Vietnamese emerging car market to pour money into making sedans here. At least, one Chinese firm will be allowed to manufacture sedans in Vietnam when the country enters the WTO.
Last but not least, three new foreign-led joint ventures including Japan’s Honda, Taiwan’s VMEP and Malaysia’s JRD are building car factories. Honda will release its favorite Civic sedan by the middle of this year.
Toyota Vietnam, the largest foreign-led carmakers in Vietnam, is the first in the country to announce a car price reduction for its popular models of Zace GL, Corolla Altis, Zace Surf, Vios 1.5G and Vios Limo from February 1.
Under the new quotation, a Zace GL will be lowered to US$27,000 from US$29,800, a Corolla Altis to US$35,500 from US$37,300, a Zace Surf to US$29.000 USD from US$32,000, a Vios 1.5G to US$25,500 from US$27,800 and a Vios Limo to US$23,700 from US$24,700.
According to market experts, discounted models are Toyota best sellers. Therefore, when the market freezes, Toyota has a large volume of these models in stock.
Toyota’s price cut will affect other foreign carmakers in the country, they said.
However, a Daewoo official said his company has no plan for increasing or reducing its car prices.
According local media, by the end of January, only Mitsubishi and Mercedes have their car prices increased. However, selling prices are normally lower than their quotations. “A Mercedes C180K Classic is sold at US$54,999 while the Mercedes-Benz quotation is US$59,200 and a Mercedes C240 Avantgarde is sold at US$64,999 but the quotation is US$81,000,” it said.
Under the statistics released by the Vietnam Automobile Manufacturers Association (VAMA), 11 operational car joint ventures sold only 1,517 cars in January, down 36 per cent against the same period last year.
Capital Security, VNexpress
Vietnamese
