Tax cuts boost small-car sales

Car manufacturers in Vietnam are rolling out small cars at reasonable prices in an effort to speed up the market.
Car manufacturers in Vietnam are rolling out small cars at reasonable prices in an effort to speed up the market.

The trend follows a draft plan to develop the Vietnam automobile industry by 2020 with a vision to 2030 by cutting consumption tax and ownership registration fees by 50 percent for vehicles with cylinder capacity of less than two litres.

According to the Vietnam Economic Forum, automobile markers have said if the draft plan is approved long-term, they will strongly invest in manufacturing.

General Motors Vietnam is one of the manufacturers who stand to benefit. It recently introduced the new, automatic, one-litre Chevrolet Spark for 377 million VND (18,000 USD). Hyundai Thanh Cong is offering Elantra models from 699 million VND to 756 million VND (33,300 to 36,000 USD).

Honda Vietnam in HCM City has displayed its City model, but has yet to announce the price. In July, Vinaxuki will offer small size VG models targeting customers in urban areas. They will sell from 220 million VND to 350 million VND.

Director of Hyundai Thanh Cong Le Ngoc Duc said policies for the industry were so changeable that his company did not dare to maintain investment in manufacture.

Duc said if the Government’s coming policies were preferential and stable for domestic manufacture, his company would boost assembling in Vietnam and attract and encourage foreign part producers to join in the country’s industry.

Director of General Motors Vietnam Gaurav Gupta said the recent cut in ownership registration fee from 20 percent to 10-15 percent of a car’s value had improved the market further and raised markers’ turnover.

“We are waiting for a renovation in Vietnam’s automobile industry policies. If the Government show preference for domestic manufacture, we will surely push up investment to increase the local-made rate, as well roll out various new models with reasonable prices,” he said.

According to Director of Vinaxuki Bui Ngoc Huyen, if the special consumption tax rate and ownership registration fee were cut for small cars, buyers would saw from 5,000 USD to 7,000 USD for each unit they purchase.

“This would bring prices down. It’s really good news, not only for those who dream of possessing cars, but also to automobile makers, who hope to boost sales,” said Huyen. “We wish the new policies are issued as soon as possible.”-VNA

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