A brand new car is beyond the reach of 90 percent of buyers in Hanoi and Ho Chi Minh City, Vietnam’s biggest cities, because of the multiple high taxes the government imposes on each vehicle, the leader of a local automaker has said.
“The auto market in Vietnam has yet to satisfy the demand of the majority,” newswire VnExpress quoted Bui Ngoc Huyen, chairman of local private automaker Vinaxuki, as saying at an automobile industry conference held by the Ministry of Industry and Trade on Tuesday.
Huyen cited a survey conducted by a market research company as saying that 90 percent of buyers in Hanoi and Ho Chi Minh City could not afford a car due to the current high tax rates.
He explained that to own a new car in Vietnam, buyers have to pay four main taxes and fees, including import tax, special consumption tax, value-added tax, and registration fees.
Those taxes and fees inflate the expense of getting a car by two or even three times the original price.
It is believed that taxation is applied to limit the number of cars running in the Southeast Asian country where the traffic infrastructure is still underdeveloped.
Nguyen Trung Quang, a businessman, is among those people in Ho Chi Minh City who can afford to buy a new car.
According to Saigon Giai Phong (Liberated Saigon) newspaper, Quang decided to buy an imported Toyota Camry 2.5Q car to serve his business after careful thought and consideration.
He had to spend US$60,000 buying the Toyota vehicle in Vietnam although it costs a mere $22,000 in the U.S.
Import tax, special consumption tax, value-added tax along with road fees, number plate charges, and insurance had been included in his total payment.
In the U.S., a BMW 760Li fetches $140,000 while the average cost of buying the vehicle in Vietnam is $318,000, according to Sai Gon Giai Phong.
Similarly buyers will have to pay $61,000 for a Toyota Camry 2.5G vehicle which is priced at roughly $22,000 in the U.S., the same newspaper reported.
A car in Vietnam is also much more expensive than in its neighboring country, Thailand.
In Thailand, the E version of the Toyota Yaris is offered for sale at $17,700 whereas it costs around VND661 million ($31,216) in Vietnam.
Or a Suzuki Swift assembled in Vietnam sells for VND550 million (roughly $26,000) but in Thailand it is sold at only $15,000.
However, Vietnam is not among the 10 most expensive places to buy a car, according to Jalopnik, a weblog covering cars, car culture, and the automotive industry which is owned and operated by Gawker Media based in New York City.
In the weblog’s list, Singapore is the priciest place to own a car despite the fact that the wealthy island state has one of the highest per capita incomes in the world.
Singapore is trying to get rid of traffic congestion by making it almost impossible to own a car, the site commented.
The remaining places include Malaysia, Indonesia, Nicaragua, China, Brazil, United Kingdom, St. Kitts and Nevis, North Korea, and Cuba.