Two associations have proposed that auto registration fees be cut by half for cars manufactured and assembled locally to boost sales.
The Vietnam Automobile Manufacturers Association (VAMA) and the Vietnam Association of Mechanical Industry (VAMI) also jointly proposed to the government that the special consumption tax on cars be delayed this year.
Both policies should be imposed in the first quarter or early second quarter, they added.
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.
VAMA said that the tightened credit policy and rising loan interest have slowed down sales, with many of its members sitting on high inventories.
Auto sales of the Vietnam Automobile Manufacturers Association (VAMA) plunged 54% year-on-year in January to 17,852 units. Sales of the TC Group, which assembles Hyundai cars, dropped 52% to 3,496 units. And VinFast’s sales of 358 units was down 83%.
Although car manufacturers are giving discounts to boost sales of domestically assembled cars, they still need a boost from policies to help the market recover.
VAMI said that the supporting industry has been receiving less orders this year, and that if sales do not bounce back, factories will have to reduce staff, which will hurt the economy.
In 2021 and 2022 Vietnam had cut auto registration fees by half to boost sales amid plunging demand. The fee returned to normal earlier this year.
TC Motor has forecast that Vietnam’s auto industry will see a 17.5% drop in sales this year compared to last year, which is equivalent to 85,500 unsold cars.
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