Car prices are about to drop 30%

Up to 30% off?

At noon on March 1, the Japanese MOL ship arrived at SPCT - Hiep Phuoc port (HCMC), bringing more than 2,000 Honda cars including 4 models: CR-V, Accord, Jazz and Civic to Vietnam with a full set of certificates for car types issued by the Thai Road Traffic Administration. In which, the CR-V clearly stated the origin of the goods: manufactured at the Honda Automobile Factory in Thailand with 4 different types. This is a quick move by Honda Vietnam (HVN) right after the Thai Road Traffic Administration issued the Vehicle Type Approval (VTA) certificate, helping Vietnamese enterprises open the door that was almost closed for cars imported from Thailand to Vietnam due to problems with the conditions of Decree 116/2017/ND-CP.

The above shipment is divided into 2 parts: 1,054 cars will be shipped to SCPT - Hiep Phuoc port and 950 cars will continue to stay on the ship to Dinh Vu port (Hai Phong). HVN representative informed that these more than 2,000 cars may have to stay at the port for nearly 2 months because they have to wait for batch inspection, so the cars will not be available on the market until the end of April to the beginning of May. Official information about the announced price and when the cars will be available on the market this week or early next week will be announced.

Experts predict car prices will decrease gradually, not immediately.

However, some Honda showrooms in Ho Chi Minh City have given predicted prices based on preferential tax calculations and these predicted numbers bring a lot of hope to consumers. Specifically, the CR-V models sold at Honda Phuoc Thanh showroom (Binh Tan District, Ho Chi Minh City) are priced from about 900 million to 1 billion VND depending on the version. This price is reduced by more than 200 million VND compared to the 1.136 - 1.256 billion VND sold before and right after Tet.

Honda Phuoc Thanh's sales representative said the car will arrive around April or May, customers who order the car will deposit 20 million VND in advance, if the car arrives at an unsatisfactory selling price, the company will return the deposit to the customer. Similarly, Honda Cong Hoa's sales representative (Tan Binh District, Ho Chi Minh City) reported that the price of the Accord and Civic models imported in this import batch can also be reduced by about 30% with all car colors. Specifically, Honda Accord 2.4 is expected to cost about 1.198 billion VND, Honda Civic costs from 900 - 950 million VND, the rolling price (including full tax, insurance, vehicle registration...) is about 1.2 billion VND.

“Because the import tax has been reduced to 0%, the prices of all imported Honda models have been reduced, estimated at about 30%. After the vehicles are cleared through customs, the company will have an official quote. Customers who have paid a deposit but are not satisfied can withdraw their money,” said the sales representative.

Cannot immediately reduce depth

Not only Honda, other companies such as Ford, Suzuki, GM VN... are also rushing to import cars from Thailand, while waiting for type quality certificates from the authorities of Indonesia and Malaysia to import some key car models. Calculations by companies show that car models that enjoy 0% import tax will be cheaper than cars of the same type manufactured and assembled in the country because in addition to enjoying 0% tax rate, cars with cylinder capacity under 2 L also have an additional 5% reduction in special consumption tax, so the price will decrease sharply.

However, economic expert Do Hoa said that consumers should not expect too much from a sudden price reduction because enjoying a 0% import tax rate will reduce car prices but certainly cannot immediately decrease by 30%. He analyzed the reason that not only affects the state budget revenue, the rapid decrease in imported car prices will cause cheap cars to immediately flood into Vietnam, causing traffic overload and putting pressure on existing infrastructure. Therefore, the Government will do everything possible, possibly increase fees or use technical barriers to limit the speed of price reduction as well as control the speed of car imports to Vietnam.

“However, although the government tries to keep domestic car prices high, once the agreement is signed, the price trend will continue to decrease and must decrease slowly. If unreasonable technical barriers are built, Vietnam will be “retaliated” against its export products. For long-term benefits, Vietnam must integrate with the world market, and market prices must gradually equalize. To build a healthy auto industry, we should create an environment for domestic auto companies to produce good products, with prices equivalent to those of other countries, not keep import car prices high to protect, losing the progress and competitiveness of domestic cars,” Mr. Hoa said.