Reducing registration fees will boost the Vietnamese automotive market.
The Ministry of Finance has studied and proposed to the Government and the Prime Minister an extension of the tax payment deadline and a reduction in registration fees for domestically produced and assembled automobiles. If the proposal is approved, it will be an important boost to alleviate difficulties in the automobile market and support manufacturing businesses in recovering and developing.
Reducing registration fees has a positive impact on consumers.
According to a survey conducted by reporters from Lao Dong Newspaper at car dealerships in Ho Chi Minh City, both citizens and dealerships are eagerly awaiting the policy to reduce registration fees.
At a Kia dealership in District 7, a sales consultant shared: "After a fairly good first quarter, the dealership's business in the second quarter has been very sluggish. While there are still customers calling for advice on cars, most are just asking about prices and waiting for the registration fee reduction before deciding to buy."
The lack of customers is also occurring at Hyundai dealerships in Ho Chi Minh City. Speaking with a Hyundai salesperson, most customers were aware that the vehicle registration fee is likely to be reduced in June. Therefore, most customers want to wait for official information before deciding to buy a car.
According to the sales director of a Ford dealership in Ho Chi Minh City, given the relatively weak car sales since the beginning of 2024, the government's policy of reducing registration fees is expected to revitalize the Vietnamese car market.
The government's new policy could also help car distributors solve many difficult problems, including the financial burden. This is understandable given that throughout the first quarter of 2024, car sales continuously declined sharply, forcing dealerships to launch many promotional programs to stimulate the market, including independently offering preferential registration fee packages.
Expectations for the automotive market after the reduction in registration fees.
According to information provided to the Lao Dong Newspaper, the Vietnam Automobile Manufacturers Association (VAMA) stated that, as of the end of May 2024, sales of domestically assembled vehicles decreased by 14%, while imported vehicles increased by 8% compared to the same period last year. In May 2024, total market sales reached 25,794 vehicles, an increase of 6% compared to April 2024 and a 24% increase compared to May 2023.
Many experts explain that the automotive market saw growth in May, especially in imported cars, while domestically assembled cars declined. With the market warming up, along with supportive policies, many experts expect domestically assembled cars to experience a breakthrough in growth after the policy to reduce registration fees is officially approved.
Regarding the policy on reducing registration fees, at the National Assembly session in early June, Deputy Prime Minister Tran Hong Ha stated that the Government would soon issue a Decree reducing registration fees for domestically produced and assembled automobiles. This policy has been applied continuously for the past three years. In the three previous implementations, the Government always applied a 50% reduction.
Experience has shown that each reduction in registration fees revitalizes the automotive market. For example, in the last six months of 2020, when this policy was implemented, the number of domestically produced and assembled cars registered for the first time was 209,584, averaging 34,930 vehicles per month, a 2.03-fold increase compared to the first six months of 2020.
Similarly, from December 2021 to May 2022, the number of domestically produced and assembled vehicles registered for the first time increased 2.67 times compared to the previous six months, reaching 398,177 vehicles. Of these, the number of domestically produced and assembled cars registered in December 2021 was 103,722 (a 2.67-fold increase compared to November 2021); the number of domestically produced and assembled cars registered in the first five months of 2022 was 294,455 (an increase of 1.2 to 2 times compared to the same months in 2021 and accounting for nearly 50% of the total number of domestically produced and assembled cars registered in 2022).
It can be said that reducing registration fees for domestically produced and assembled cars has contributed to providing financial support to people and businesses, thereby boosting domestic purchasing power, creating momentum for resuming production, reconnecting supply chains, and restoring the growth rate of the automotive manufacturing and assembly industry. Therefore, this policy is highly anticipated by the public.
