An auto assembly line at Truong Hai Auto Corporation at Chu Lai Open Economic Zone in Quang Nam province (Source: VNA) Hanoi (VNS/VNA) - Afterthe Government’s move to lower car registration fees by half took effect morethan a week ago, the domestic car market has picked up.
Prime Minister Nguyen Xuan Phucdecided to cut 50 percent of registration fees for locally-manufactured andassembled cars till the end of this year. The reduction was proposed bythe Ministry of Industry and Trade to help local businesses recoverproduction and trade as well as stimulating consumption of cars.
Cars currently have aregistration fee of 12 percent of the car value in Hanoi, and 10 percent inother cities and provinces nationwide.
Auto dealers said the number ofcar buyers had increased by some 20 percent.
In the Vietnamese automobilemarket, locally-assembled cars are priced at the lowest from 299 million VND (12,892USD) for Kia Morning and up to 4.9 billion VND for Mercedes-Benz S 450 L Luxury.
For the cheapest Kia Morningpriced 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 29.9million VND to 35.88 million VND as before.
For the best-selling cars inthe Vietnamese auto market such as Toyota Vios priced from 470 million VND to570 million VND or Hyundai Accent with 426 to 542 million VND, car buyers cansave up to 34.2 million VND due to the registration fee cut.
Luxury car production andassembly in the country with high prices will benefit the most. In Vietnam, theonly luxury car brand assembled in the country is Mercedes-Benz, with themost 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 VNDbut now cost only from 210 million VND to 298 million VND.
Nguyen Thi Thuy, a car buyer inHanoi’s Hoang Mai district told VietnamNews that she took advantage of the policy to buy a new car a fewdays ago.
“I planned to buy an old cardue to a limited budget. However, I decided to buy a new one at the last minutethanks to the registration fee reduction. I saved some 40 million VND from thecut,” she added.
Some auto dealers in Hanoi saidthe policy has been warming up the market after a long stagnation dueto the COVID-19 pandemic.
Dinh Van Trong, Director ofHyundai Dong Do, said the number of car transactions had increased by 30 to 40 percentagainst the time of the height of the pandemic. Small cars with prices of 500to 600 million VND each had the highest sales. The market is receiving positiveresponses from the Government's stimulus policy while businesses also reducethe cost burden.
Nguyen Van Hau, arepresentative from Mazda Giai Phong, told VietnamNews that their car sales increased from 42 in May to 120 in June (up300 percent) after the registration fee cut took effect. There were some 100car buyers lodging deposits to buy cars before June 28 to enjoy the fee cut.
“We are offering 40-80 millionVND off depending on kinds of cars on registration fees for customers. AfterJune 28, the number of signed contracts waiting for car delivery was stillhigh. We still have 80 cars that have not been delivered to customers whoreserved due to a lack of supply,” he said.
He added that car demand at hisdealership was higher than the supply, making them roll back some promotionalprogrammes which were applied during the COVID-19.
In areas neighbouring Hanoi,car dealers' representatives also noted that the market for assembled cars hadheated up, as opposed to imported cars. For example, Mitsubishi with six out ofseven models imported cars, the number of transactions did not changesignificantly. Locally assembled car manufacturers had a sudden increase in theearly days after the policy took effect.
Experts said car sales wouldcontinue to increase this month as many customers signed contracts beforeand would get their car later to enjoy the policy.
However, they said theregistration fee cut only applies to domestically-assembled cars,so businesses need to balance their policies to avoid the situation ofconsumers turning their backs on local cars after the fee cut ends and waitingfor imported ones./.
VNA
