The country spent more than US$1 billion on importing 55,000 new cars in 2011, despite economic difficulties, estimated the General Statistics Office (GSO).
|Visitors check a new car in the central city of Da Nang. The country spent over US$1 billion on importing 55,000 new cars in 2011, despite economic difficulties. |
The figures were up 2.1 per cent in volume and 4.2 per cent in value against the previous year.
The last month of the year saw 4,000 units worth $64 million imported, up on the previous month where 3,000 units totalling $52 million were bought into the country.
The GSO said that the car market had been quieter than in previous years and the usual surge in sales ahead of the Lunar New Year had been weak. In the last five months of 2011, an average of 3,400 cars worth $63 million were imported per month, considerably lower than the past two years.
Industry insiders said that 2011 had been a tough year because the Government issued a series of measures and increased tax on imported cars in a move to restrict imports and curb the national trade deficit.
They added that the tax hike had added thousands of dollars to the cost of each imported car, leading to the year-end slump.
In June, the General Department of Customs set higher minimum tax brackets for hundreds of imported car models. Tax on both new and used cars rose between 2 and 20 per cent compared to the end of 2010, which translated into an increase of up to thousands of US dollars.
In the same month, the Ministry of Industry and Trade issued Circular 20 which required automobile importers to fulfil extensive procedures to trade vehicles with under 10 seats. These restrictive procedures included a letter of attorney from manufacturers, contracts legalised by Vietnamese diplomatic offices overseas and auto maintenance certificates granted by the Ministry of Transport.
Import taxes on used cars have also been raised since August. Under the new regulations, used cars with engines of 1.5 litres or more are subject to the same tax rates as new cars of the same model, which range between 77 and 83 per cent of their total value. An additional $5,000 to $15,000 levy is also imposed on used cars, depending on their engine capacity. Previously, used cars were only subject to a fixed import duty, starting at $3,500 per car.