Less fond of foreign cars, Vietnamese still spend billions of dollars importing cars

Domestic enterprises spent a total of VND26,320 billion (nearly USD1.2 billion) to import about 49,000 foreign cars in the first 6 months of the year, down 11-21% in volume and price compared to the same period in 2015.

A report from the General Statistics Office (Ministry of Planning & Investment) shows that imported car sales decreased sharply in the first 6 months of the year. Specifically,Imports of complete automobiles are estimated at 49,000 units, with a total value of more than 1.18 billion USD.On average, Vietnam imports about 270 cars per day, a sharp decrease compared to 307 cars in the same period.

Super cars flock to Vietnam at the end of June.

Meanwhile, in the same period of 2015, Vietnam spent up to 1.5 billion USD to buy 55,356 cars. Thus, the import of completely built-up cars in the first half of this year hasdown 11.2% in volume and 21.2% in value over the same period.

In June alone, car imports reached 8,000 units, worth 216 million USD. Although the number of imported cars decreased by 4,000 units compared to May, the value was higher, showing the trend of "tax evasion" of luxury and large-capacity cars.

According to regulations, from July 1,Expensive cars with engine capacity from 2.5 liters will have a sharp increase in special consumption tax, the larger the capacity of the car, the higher the tax will be. In particular, the sharpest increase is in cars over 6 liters (60-150%). Therefore, many expensive cars have rushed into Vietnam before the tax increase.In the long term, the higher the tax burden, the lower the consumption of foreign cars.

In early 2016, the Ministry of Finance also changed the way of calculating Special Consumption Tax based on the selling price of the importer (wholesale price) but not lower than 105% of the cost price of imported vehicles. According to the old regulation, the taxable price was only the CIF price at the port plus import tax. Therefore, labor costs, transportation, advertising... were also included in the tax calculation.

The combined impact of the above two factors has made foreign cars in Vietnam less attractive in price.According to an importer, for example, the Lexus LX570 (5.7 liter) when applying the new special consumption tax of 130%, the car will be sold at a popular price of 7.5 billion, of which taxes and fees account for 4.8 billion VND.

It is forecasted that the import of completely built-up cars in 2016 will decrease sharply compared to 2015.Mr. Dang Nhu Quynh - General Director of 999999999 Joint Stock Company commented that the sales of imported cars in the coming time will be more or less affected by high taxes and fees.

According to VNE