Car sales forecast to slow this year

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Báo Dân Trí English - 2 month(s) ago 5 readings

Vehicle sales are forecasted to drastically fall in 2017 as customers await lower prices in 2018 when tariffs on car imports from ASEAN countries will be fully removed.

Vehicle sales are forecasted to drastically fall in 2017 as customers await lower prices in 2018 when tariffs on car imports from ASEAN countries will be fully removed.

Car prices in Vietnam are much higher than those in regional countries due to higher taxes. Currently, a vehicle which is produced in Thailand or Indonesia is priced at just VND250 million (USD11,360), however, it is sold at up to around VND600 million after being imported into Vietnam due to the country’s high taxes.

Following the ASEAN Trade in Goods Agreement, Vietnam will fully remove tariffs on imported cars from ASEAN countries from 2018. It is forecast that prices of vehicles worth less than VND1 billion will decrease sharply in 2018. The price of a current VND600-million car will decrease to VND400-450 million in 2018.

This will probably mean lower car sales this year.

Minoru Kato, General Director of Honda Vietnam, said that 2017 would be a tough time for car manufacturers. The Vietnam Automobile Manufacturers' Association believe the Vietnamese car market would see growth of 10% compared to 2016.

However, many people said that the prices of ASEAN-imported autos will not fall as expected in 2018 as the government would increase special consumption and value-added taxes to cover the car import tariff removal. This is also aimed to protect the domestic car industry.

Regarding this concern, lots of other people still believed that ASEAN-imported car prices in Vietnam would be much slashed in 2018 despite the government’s tax increases. At least USD3,000 worth taxes are raised for each vehicle imported from ASEAN countries so prices in 2018 could be as high as they are now.

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