50% reduction in registration fee, car market is bustling at the end of the year

On siteVinh CityNowadays, almost all car brands have appeared, from domestically assembled popular cars to imported high-end cars.

At this time, in order to compete to complete the year-end sales target, car manufacturers have simultaneously launched support packages and discounts, making the car market quite vibrant. Currently, in addition to launching promotional packages with accompanying accessories, many car manufacturers with imported car products also launch the form of registration fee support, even some car manufacturers with high localization rates continue to promote support of 50% of the remaining registration fee, after the registration fee has been reduced by 50% according to regulations, this makes the actual car price can be reduced from 40 million VND to 100 million VND/car.

On the customer side, at this time many people have the need to buy a car to serve their family, and to travel during Tet, they have quickly chosen a suitable car for their family.

People choose car models at the showroom. Photo: Tien Dong

Mr. Tran Duc Dung - residing in Truong Thi ward, after buying a car in November, only went to the Vinh City Tax Department today to complete the registration fee declaration procedure. Mr. Dung said that after learning about the car price as well as the information about the 50% reduction in registration fee from December 1, he quickly paid a deposit to enjoy the company's promotion program, and did not rush to register immediately but waited until the registration fee was reduced before completing the procedure. This allowed Mr. Dung to benefit from both the car's selling price and the registration fee.

According to statistics from thecar showroom, in October and November 2021, after receiving information that the Ministry of Finance had asked for opinions from ministries, branches and localities on the draft decree on reducing 50% of registration fees for domestically produced and assembled cars, a number of car showrooms began to welcome many customers to make "reservation" contracts for the car model they liked, waiting for information about the specific tax reduction time to register.

According to statistics, from January to November 2021, 7,011 new cars were registered in Vinh City. Photo: Thu Huyen

Mr. Phung Ba Ngoc - DirectorToyota Song Lam Joint Stock Companysaid: Since the information about the reduction of registration tax for domestically assembled cars, the number of customers coming to deposit cars at the unit has increased by about 40% compared to the previous time. In November alone, about 130 customers registered to buy cars. Mr. Ngoc also said that because he knew about the application of a 50% reduction in registration tax for domestically assembled cars from December 1, many people after depositing have not yet picked up the car, or picked up the car but have not registered it immediately, but waited until the tax reduction period to do the procedures.

On November 26, 2021, the Government issued Decree 103/2021/ND-CP stipulating the registration fee for domestically manufactured and assembled automobiles, trailers or semi-trailers and similar vehicles. Accordingly, from December 1, 2021 to May 31, 2022, the registration fee will be equal to 50% of the fee prescribed in Decree No. 20/2019/ND-CP dated February 21, 2019 of the Government amending and supplementing a number of articles of Decree No. 140/2016/ND-CP dated October 10, 2016 of the Government on registration fees. From June 1, 2022 onwards, the registration fee will continue to be implemented as per the old regulations.

At Honda Vinh, the number of customers coming to deposit to buy cars in November also reached more than 110 cases.

According to information from car showrooms, after the reduction in registration fees is applied, companies will also cut down on promotional programs to maintain profits.

The reduction in registration fees for domestically produced and assembled cars is considered a “lever” to stimulate demand for the Vietnamese automobile market. A 50% reduction in registration fees does not affect the selling price of cars produced and sold by domestic automobile manufacturers and dealers, because in fact this is a revenue after customers have purchased the car. However, a 50% reduction in registration fees will create an advantage for domestic cars over completely imported cars.

According to the synthesis of Vinh City Tax Department, from January to November 2021, the whole province had about more than 14,000 newly registered cars, of which Vinh City had up to 7,011 cars. On December 1, 2021 alone, the first day of applying the reduction in registration fees, many people came to do the procedures.

The number of people paying registration fees at the Vinh City Tax Department has increased dramatically since the 50% reduction in registration fees took effect from December 1, 2021. Photo: Tien Dong

Mr. Nguyen Phuong Duc - Head of the Registration and Other Collection Team, Vinh City Tax Department, assessed that the Government's reduction of car registration fees will certainly have positive impacts in stimulating consumer demand, encouraging people to shop and own assets; impacting on promoting domestic car manufacturing and assembling enterprises to reconnect the supply chain, increasing investment in car manufacturing and assembling in Vietnam. For Nghe An, the reduction of car registration fees is expected to increase the province's budget revenue in the last months of the year./.-