Econ
Enterprises to boost car import after tax reduction
According commitments when joining the Free Trade Agreement in ASEAN (AFTA), the import duty automobiles from the ASEAN region fell from 40% to 30%; tax cuts helped reduce car prices by 7% compared to 2016.
Right from January 1, Honda has announced discounts of 80 million for 2017 Model Accord 2.4L version imported from Thailand. On February 6, Toyota issued a report on how much discount for vehicles with a drop from 44 -164 million/vehicle.
Although trading companies that imported cars has declined, but the consumption is not increasing as expected. Data from the Association of Vietnam Automobile Manufacturers (VAMA) released show that total sales of 20,232 vehicles only January, 2017, down 39% compared to December, 2016. The reason is that in January of the calendar coincided with Tet Holiday, many consumers did not rush to buy cars, because it was less able to promptly complete the registration procedures for vehicles.
In Vietnam, Motor Show exhibition took place in Hanoi in late 2016, representatives of several major automakers said, if there were no other changes in tax policies, fees, according to the schedule of tariff reduction of 0% by 2018, is likely to import Thai vehicle production. The reason is that the cost of producing a car in Vietnam is higher than that in the ASEAN countries so the assembly will not be as effective as the imported.
Regarding this issue, according to economist Le Dang Doanh, Vietnam automobile market will not have many big changes by reducing import tariffs from ASEAN, but the Ministry of Finance is considering to raise other taxes to avoid loss of revenue from the automotive industry as well as revenues under pressure. However, to 2018, when the import tax to 0%, the number of imported cars will definitely increase.
Vietnam automobile industry withstands automotive imports, according to Dao Phan Long, Vice Chairman of Vietnam Mechanical Association (VAMI). "Recently, the Law Amending and Supplementing Article 6 and Annex 4 for list of lines of business and investment conditions of the Investment Law passed by the National Assembly, will come into force on July 1, 2017. In particular, provisions on production, assembly, automobile import business line is conditional," Dao Phan Long stated.
