Zero import tax expected to raise Vietnam’s car ownership
The import tax for cars imported from ASEAN has been slashed to 0% from January 1, 2018
Tax for cars imported from ASEAN has been slashed to 0%, which is expected to raise the country’s car ownership rate which remains low compared to regional averages.
Owners of many auto showrooms claimed lots of customers had made deposits to buy ASEAN-imported cars while awaiting zero import duties.
Dinh Quoc Dinh in Thu Duc District, HCM City, said he would put down a deposit to buy a Vios which is up to VND48-58 million cheaper now than before January 1.
To prepare for the zero import duties, a large number of ASEAN-imported cars have been brought to Vietnamese ports. At present, there are around 1,700 cars and pickup trucks at Hiep Phuoc Port in HCM City with the majority imported from Thailand and Indonesia.
Bui Xuan Truong, director of Truong Thanh Auto, said that the zero import duties could attract more customers to buy cars and the car sales are expected to boom early this year. Thailand and Indonesia will benefit the most among ASEAN countries from the zero import duties policy as they have many car models which meet the localisation rate of more than 40%.
Apart from this, the Special Consumption Tax reduction will be applied for low engine displacement vehicles, while the increase of this tax will be for high engine displacement vehicles. This will create opportunities for middle-income people in Vietnam to buy their own vehicles.
Following the lower taxes, prices of many car models have fallen considerably this year. Hyundai Thanh Cong showroom has announced to cut the price of Hyundai Grand i10 by VND20-40 million (USD909-1,818). Toyota Vietnam has also announced the car prices this year with the reduction ranging between VND24-58 million against 2017.
According to the survey by the marketing strategy consulting firm Solidiance released in last June, the car ownership ratio in Vietnam was only 16 cars for 1,000 people. This rate was lower than Malaysia’s 341 cars, Thailand’s 196 cars and Indonesia’s 55 cars.
One of the reasons is because prices are still high. Car manufacturing, as well as supporting industries, remains weak so Vietnam has to import completely built units. Moreover, poor…