Auto manufacturers are paying half of or all of the March registration fees for their customers’ vehicles to stimulate demand in the sleepy car market.
The plan has already led to some decreases in car retail prices, but experts are uncertain if declining sales will recover this year or not.
Japanese companies Toyota, Honda, Mitsubishi and Suzuki, as well as Britain’s MG, are paying 50% of registration fees, while Nissan from Japan is paying a full 100% of fees.
The registration fee support results in lower selling prices, with reduction rates depending on the locality where the customer registers the vehicle’s license plate.
The registration fees are calculated based on car prices in each locality. The rates are 12% in Hanoi and Hai Phong, and 10% in HCMC.
The current high lending interest rate of over 10%, is one of the main reasons for the weakening demand for cars, according to dealers.
Some experts and automotive manufacturers have predicted that if the difficult economic situation persists, car demand may continue to decrease sharply this year, even after the industry recorded more than half a million units in sales last year.
Auto sales of the Vietnam Automobile Manufacturers Association (VAMA) plunged 54% year-on-year in January to 17,852 units.
The Government on March 9 asked the finance and industry ministries to consider reducing car registration fees and extend payment schedules for special consumption taxes on domestically assembled vehicles.
The ministries will submit a report on the two newly proposed policies to the Prime Minister before March 20.
Along with authorities from various localities, the Vietnam Automobile Manufacturers Association has recently been asking the Government for the schedule extensions, and a halving of registration fees on domestically assembled vehicles.
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