Business
Despite tax hike, Vietnam still attractive to foreign auto manufacturers
While complaining about difficulties, foreign automobile manufacturers still could reap fruit in 2015. Despite big problems, they still want to cooperate with Vietnam’s automobile industry.
The country’s auto industry witnessed growth rate of 55% in 2015 over 2014, which was described as ‘beyond any expectations’.
A VAMA report showed that 244,914 cars were sold in the year. This included 173,040 domestically assembled cars, up by 48% and 71,874 import products, up by 74%.
Toyota Vietnam leads the market in the number of sedans sold. It sold 49,778 cars in 2015, an increase of 22% over the year before.
Of the 10 best sellers, five belonged to Toyota Motor Vietnam, namely Vios, Fortuner, Innova, Altis and Camry.
Analysts cited two reasons behind the automobile market’s boom. First, the demand for cars has been increasing recently as people prepare for Tet holiday. Second, people are rushing to buy cars to avoid price increases to come as a result of the luxury tax increase.
Decree 108 released on October 28, 2015 stipulates that the taxable price will be the importers’ wholesale price, not the CIF price plus the import tariff.
With the new taxation, the new price would be 5-15% higher. Anticipating this, Mercedes Benz and Toyota Vietnam have raised selling prices.
Pham Van Dung, general director of Ford Vietnam, said 2015 was a year of prosperity for automobile manufacturers with many important events, including the approval of TPP and the government’s decree guiding the implementation of the Special Consumption Tax which took effect on January 1, 2016.
Dung believes that the automobile market would be more competitive in 2016 with the presence of nearly all big auto manufacturers in Vietnam and a wider range of products. And that though policies may change, investors would still be active.
According to Mark Kaufman from Ford, Vietnam is Ford’s third largest market, following Thailand and the Philippines, in South East Asia.
Ford keeps injecting money into Vietnam even though the business result here is still below expectations. The manufacturer has poured US$10 million in the last two years to upgrade its factory in Vietnam.
In early April 2015, Toyota Vietnam said it may reconsider production in Vietnam.
However, Toyota Vietnam’s general director Yoshihisa Maruta most recently said to Doanh Nhan Sai Gon reporters that Toyota would continue to ‘side with Vietnam, provide the best cars and make greater contributions to the society, no matter how the situation will change in the next 20 years’.
A VAMA report showed that 244,914 cars were sold in the year. This included 173,040 domestically assembled cars, up by 48% and 71,874 import products, up by 74%.
Toyota Vietnam leads the market in the number of sedans sold. It sold 49,778 cars in 2015, an increase of 22% over the year before.
Of the 10 best sellers, five belonged to Toyota Motor Vietnam, namely Vios, Fortuner, Innova, Altis and Camry.
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Decree 108 released on October 28, 2015 stipulates that the taxable price will be the importers’ wholesale price, not the CIF price plus the import tariff.
With the new taxation, the new price would be 5-15% higher. Anticipating this, Mercedes Benz and Toyota Vietnam have raised selling prices.
Pham Van Dung, general director of Ford Vietnam, said 2015 was a year of prosperity for automobile manufacturers with many important events, including the approval of TPP and the government’s decree guiding the implementation of the Special Consumption Tax which took effect on January 1, 2016.
Dung believes that the automobile market would be more competitive in 2016 with the presence of nearly all big auto manufacturers in Vietnam and a wider range of products. And that though policies may change, investors would still be active.
According to Mark Kaufman from Ford, Vietnam is Ford’s third largest market, following Thailand and the Philippines, in South East Asia.
Ford keeps injecting money into Vietnam even though the business result here is still below expectations. The manufacturer has poured US$10 million in the last two years to upgrade its factory in Vietnam.
In early April 2015, Toyota Vietnam said it may reconsider production in Vietnam.
However, Toyota Vietnam’s general director Yoshihisa Maruta most recently said to Doanh Nhan Sai Gon reporters that Toyota would continue to ‘side with Vietnam, provide the best cars and make greater contributions to the society, no matter how the situation will change in the next 20 years’.
