Vietnamese people 'willing to spend' billions of dollars importing cars

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, the import of completely built-up cars is 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 the level of 307 cars in the same period.

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 decreased by 11.2% in quantity and 21.2% in value compared to the same period.

Super cars flock to Vietnam at the end of June.

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 cars with large capacity.

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, the higher the tax. 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 will be.

In early 2016, the Ministry of Finance also changed the way Special Consumption Tax is calculated based on the importer's selling price (wholesale price) but cannot be lower than 105% of the cost price of imported cars. According to the old regulation, the taxable price is only the CIF price at the port plus import tax. Therefore, labor costs, transportation, advertising... are also included in the tax calculation.

The combined impact of the above two factors makes 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.

It is forecasted that imported complete 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 increased taxes and fees.

According to VNE