Reducing registration fees, supporting the Vietnamese automobile market
The Ministry of Finance has researched and proposed to the Government and the Prime Minister to extend the tax payment deadline and reduce registration fees for domestically produced and assembled cars. If the proposal is approved, it will be an important support to remove difficulties for the car market and support manufacturing enterprises to recover and develop.
Reduction in registration fees has positive impact on consumers
According to a survey by Lao Dong Newspaper reporters at car dealerships in Ho Chi Minh City, both residents and dealerships are looking forward to the policy of reducing registration fees.
At a Kia dealership in District 7, a sales consultant shared: "After a good first quarter, the dealership's business situation in the second quarter was very gloomy. There were customers calling for car advice, but most of them asked for price information and waited for the registration fee reduction before deciding to buy."
The lack of customers is also happening at Hyundai dealerships in Ho Chi Minh City. Talking to a Hyundai car sales person, most customers already know that the registration fee will likely be reduced in June. Therefore, most customers want to wait for official information before deciding to buy a car.
The sales director of a Ford brand dealership in Ho Chi Minh City said that in the context of weak car purchasing power since the beginning of 2024, the Government's policy of reducing registration fees is expected to help the car market in Vietnam become more vibrant.
The Government's new policy can also help auto distributors solve many difficult "problems", including financial burdens. This is understandable when throughout the first quarter of 2024, auto sales continued to decline sharply, forcing dealers to launch many promotional programs to stimulate the market, including launching their own preferential registration fee packages.
Expectations for the auto market after registration fee reduction
Informing Lao Dong Newspaper, the Vietnam Automobile Manufacturers Association said that by the end of May 2024, sales of domestically assembled cars decreased by 14%, while imported cars increased by 8% compared to the same period last year. In May 2024, sales of the entire market reached 25,794 cars, an increase of 6% compared to April 2024, an increase of 24% compared to May 2023.
Many experts explained that the automobile market in May grew, especially imported cars, while domestically assembled cars decreased. With the warming of the market, along with "support" from policies, many experts expect domestically assembled cars to grow rapidly after the policy of reducing registration fees is officially approved.
Regarding the policy of reducing registration fees, in the National Assembly session in early June, Deputy Prime Minister Tran Hong Ha said that the Government will soon issue a Decree to reduce registration fees for domestically produced and assembled cars. This policy has been applied continuously for the past 3 years. The previous three times, the Government always applied a 50% reduction.
Through practice, it has been proven that each time the registration fee is reduced, the automobile market is revived. Typically, in the last 6 months of 2020 when this policy was applied, the number of domestically produced and assembled cars registered for the first time was 209,584 vehicles, an average of 34,930 vehicles/month, an increase of 2.03 times compared to the first 6 months of 2020.
Similarly, from December 2021 to May 2022, the number of domestically manufactured and assembled vehicles registered for the first time increased by 2.67 times compared to the previous 6 months, to 398,177 vehicles. Of which, the number of domestically manufactured and assembled vehicles registered in December 2021 was 103,722 vehicles (an increase of 2.67 times compared to November 2021); the number of domestically manufactured and assembled vehicles registered in the first 5 months of 2022 was 294,455 vehicles (an increase of 1.2 to 2 times compared to the same period in 2021 and accounting for nearly 50% of the total number of domestically manufactured and assembled vehicles registered in 2022).
It can be said that the reduction of registration fees for domestically produced and assembled cars has contributed to financial support for people and businesses, thereby promoting domestic purchasing power, creating momentum for re-production, reconnecting the supply chain, and restoring the growth rate of the automobile manufacturing and assembly industry. Therefore, this policy is highly anticipated by the people.
