Hanoi (VNA) – The domestic automobile market is expected to thrive in the second half of 2020 after a long stagnation due to the COVID-19 pandemic, driven mainly by the Government’s great support and strong discounts from dealers.

Auto market expected to prosper in year-end months hinh anh 1Big car dealership promotions have been launched to attract buyers (Photo: VietnamPlus)

Customers to enjoy special offers

Under the Government’s Decree No.70/2020/ ND-CP, 50 percent of registration fee is cut for locally-manufactured and assembled cars till the end of this year. The reduction was proposed by the Ministry of Industry and Trade to help local businesses recover production and trade as well as stimulating the sale of cars.

Cars currently have a registration fee of 12 percent of the car value in Hanoi, and 10 percent in other cities and provinces nationwide.

Auto dealers said the number of car buyers had increased by some 20 percent.

In the Vietnamese automobile market, locally-assembled cars are priced at the lowest from 299 million VND (12,892 USD) for Kia Morning and up to 4.9 billion VND for Mercedes-Benz S 450 L Luxury.

For the cheapest Kia Morning priced at 299 million VND, with a registration fee from 10 to 12 percent, car buyers only need to pay 14.95 million VND to 17.94 million VND, instead of 29.9 million VND to 35.88 million VND as before.

For the best-selling cars in the Vietnamese auto market such as Toyota Vios priced from 470 million VND to 570 million VND or Hyundai Accent with 426 million VND to 542 million VND, car buyers can save up to 34.2 million VND due to the registration fee cut.

Luxury car production and assembly in the country with high prices will benefit the most. In Vietnam, the only luxury car brand assembled in the country is Mercedes-Benz, with the most expensive model the S 450 L Luxury, priced from 4.2 to 4.9 billion VND. Registration fees were previously from 420 million VND to 596 million VND but now cost only from 210 million VND to 298 million VND.

The second half must be a golden time for customers to own their favourite car brands as local car dealers are offering attractive promotions and freebies to clear their stocks, making auto prices more attractive than ever before.

TC MOTOR continues discount programmes for its Mazda models, with CX-8 cars on strongest sale of up to 200 million VND, and price of CX-5 cut from 80-120 million VND.

Vietnamese automotive manufacturer VinFast also launches special promotions such as free car registration programme, and zero interest rate instalments in two years for its Fadil, Lux A2.0, Lux SA 2.0.

Auto market expected to prosper in year-end months hinh anh 2VinFast is offering free car registration programme (Photo: VinFast)

The second half must be a golden time for customers to own their favourite car brands as dealers will offer special promotions.

Domestic car market warms up

According to the Vietnam Automobile Manufacturers’ Association (VAMA), sales of domestically-assembled automobiles in the first half dropped 43 percent while that of imported vehicles fell 21 percent from the same time last year.

However, in May, 11,095 domestically-assembled automobiles were sold, up 50 percent from April, and the figure in June was recorded at 15,874 units, a hike of 43 percent from the previous month.

Several car manufacturers are considering assembling favoured units locally rather than importing them so as to enjoy bigger advantages.

Under the Decree No.57/2020/ND-CP, dated May 25, zero-import tax has been applied on automobile components from July 10 in an effort to promote domestic automobile production and assembly industry in the 2020-2024 period.

This would also mean that more automakers would enjoy the tariff compared to those regulated in Decree 125/2017/ND-CP dated November 16, 2017. In the previous decree, automakers must reach regulated output levels to enjoy the tax incentives, which benefits only producers with high output. For example, companies must produce at least 8,000 nine-seat cars with cylinder capacity of 2,500 cc or less in 2018 and 13,500 cars in 2022 to be eligible for the tariff.

Auto market expected to prosper in year-end months hinh anh 3The Government will launch various policies to support local auto market (Photo: VNA)

Nguyen Trung Hieu, head of the VAMA’s Policy Subcommittee, said “Under the new decree, even businesses like Honda and Mitsubishi who assemble only one or two models, are eligible to enjoy the advantage if they meet requirements in minimum output.”

Meanwhile, the Ministry of Finance said the programme has reached its target in encouraging local auto market development in the context that cars imported from other ASEAN countries are enjoying zero percent tariffs.

Furthermore, the programme also attracts businesses to expand their production such as Ford Vietnam, Honda and Mitsubishi./.