Hopes of Cheap Imported Cars Cut Imports by Half
Many Vietnamese car dealers have delayed auto import contracts until May when the country allows the importation of used cars, hoping for a new lucrative market. However, the recently approved taxation mechanism is likely spoiling their desire.
The imported automobile volume has fallen by half to a mere 2,000 units worth $13 million in the first three months of this year, a 50 per cent and 43.5 per cent decreases against the same period last year, respectively, according to the General Statistics Office (GSO).
However, expectations of both car dealers and consumers to have low-priced autos in the domestic market have been seriously shattered as the government has decided to apply an absolute tax on imported secondhand cars.
With this taxation mechanism in combination with a special consumption tax and a value-added tax, the tax volume is forecasted to averagely equal over 600 per cent of the car import price.
Meanwhile, with slow sales in the domestic market, automakers in Vietnam cut spending by half to $80 million to import car components for assembly in the three-month period. The total car output in the country was down 30 per cent between January and March.
According to the Vietnam Automobile Manufacturers Association (VAMA), sales by 11 operational carmakers were down 21 per cent to 2,984 units in January and February of this year.
Last year, Vietnam spent $280 million on importing 17,000 automobiles, down 3.2 per cent on year in value and 24.3 per cent in volume, said the GSO. The country also disbursed $800 million on auto components in the year.
Vietnam Panorama
Vietnamese
