Prices of imported used cars will possibly be equal to 30 per cent or 50 per cent of new locally made cars, said Bui Duy Thuc, director of Haiphong Import-Export Co., implying more pressures will be put on local carmakers’ pricing mechanisms.
The import of used cars will further drive down prices of locally made cars, which are reportedly at least 1.5-2 times higher than prices in regional countries.
Prices of used cars depend on brands, models and operational lifetimes. However, in general, they are quite low, Thuc said.
Following Toyota’s announcement to reduce prices for its popular models, Ford and Vidamco, which have not made official price cuts, are selling their cars at prices lower than their quotations.
For example, a US$46,400 Ford Mondeo 2.0 was offered a discount of US$3,500, a $41,900 Ford Escape 2.3L has a discount of $2,000 and a $47,900 Ford Escape 3.0 was discounted $3,000.
Vidamco, a branch of GM Daewoo Auto & Technology Co., said it offers discounts up to $3,000 for its popular models like Magnus, Lacetti, Gentraa, Lanos and Matiz.
In the meantime, all production workers of Isuzu have been off work since after Tet (the Lunar New Year) because it assembled a large volume of vehicles before the holiday. Now, only sales, service and administrative divisions are at work.
According to a close source, another car joint venture will also have its workers out of work because it cannot sell in-stock cars.
In January, all 11 operational foreign-led car joint ventures sold only 1,517 units, down 34 per cent. However, Toyota Vietnam alone held up to 53.5 per cent of the market share.
Worse still, car sales will be further hit when the Government does not allow State agencies to buy cars. Traditionally, State officials and enterprises are major customers of automakers.
To calm local carmakers, the director of the Ministry of Finance’s Taxation Policy Department Quach Duc Phap said imports of large volumes of used cars will not be allow in the initial stage.
The Ministry of Finance will impose high taxes on imported used cars, he explained. “The ministry will levy import tariff of 150 per cent instead of the previously ratified 135 per cent,” he said.
Besides, the Ministry of Trade will grant import quotas for car trading companies, which means that car traders cannot import more than their permitted volumes.
However, car makers operating in the country strongly protest against the new ruling on the allowance of importing used cars.
Mr. Nguyen Hop Ky, director of the foreign affairs department of Mercedes-Benz Vietnam, said over 90 per cent of used cars failed to meet emission standards. Vietnam may become a dumping ground for industrial nations, he added.
“No country in the world allows importing of used cars to push its automotive industry into hard situation,” another car joint venture said.
According to the ruling, all Vietnamese entrepreneurs without foreign direct investment can import used cars. It means students learning abroad and overseas Vietnamese can bring cars into Vietnam in the forms of belongings or gifts. The import quota is only imposed on enterprises importing large volumes.
Used cars, which must not exceed five years old dating from manufacture to import dates, will be allowed to enter Vietnam from May 1, 2006.
VNexpress
Vietnamese
