Total car output in Vietnam is estimated to fall 39.6 per cent on year in January-April period to 9,537 units principally due to slow sales, according to the government's General Statistics Office (GSO).
"Slow domestic sales in recent months have forced carmakers in the country to cut down production," an authority in the Ministry for Industry said.
Carmakers in the country find it hard to sell their products since the government introduced unfavorable tax mechanism against domestic carmakers, a local auto firm said.
Since the beginning of this year, import tariffs and a special consumption tax on imported new cars dropped to 50 per cent and 90 per cent from 80 per cent and 100 per cent, respectively.
Further, the permission for the entry of used passenger cars from May 1 worsened the sales situation, said the carmaker.
These policies prompted potential car buyers to delay their purchasing decisions although domestic auto firms have cut prices and offered attractive after-sales services, he added.
Foreign-led carmakers still dominate the Vietnamese automotive industry with the production of 6,915 units in the first four months and 1,872 units in April, followed by the private firms with 1,811 units and 522 units, and the State firms with 811 units and 244 units, respectively.
With a fledging auto industry, all carmakers in the country have to import parts for production. They spent around $57 million on car parts in January and April of this year.
Last year, the auto industry turned out nearly 65,000 units, up over 30 per cent on year.
Vietnam Panorama
Vietnamese
