Monday , July 15 2024

Auto registration fee cut might not boost sales this time: finance ministry

A 50% reduction in registration fees might not cause automobile sales to surge unlike the last two times due to the current economic situation, the Ministry of Finance warned.

It is drafting orders for the 50% cut in registration fees for vehicles manufactured locally for the remaining months of this year to revive a flat market.

But it admitted the impact might be modest.

When a similar reduction was made in the last six months of 2020 and again for the six months ending May 2022, auto sales doubled since the supply chain had been disrupted and the cuts made companies anxious to get them back on track.

But this year demand might remain sluggish despite the cut since the economy is seeing a strong decline in industrial activity and exports, high inflation and low GDP growth.

These factors would have a major impact on auto demand.

In the first four months, the Vietnam Automobile Manufacturers Association saw 92,801 cars sold, down 30% year-on-year.

Experts have predicted that total vehicle sales this year are unlikely to reach last year’s figure of half a million units.

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