Vietnamese consumers are disillusioned as they still cannot get imported cars with 0% tax.
Many people who expected to buy cheap cars right after January 1, 2018, when import taxes on cars from ASEAN countries would be reduced to 0%, have had their hopes dashed, as no cars have yet been imported at this tax rate.
If you want a new car, you have to wait.
According to some business owners, Decree 116 is the biggest obstacle preventing manufacturers from bringing imported cars into Vietnam in time for January, and the earliest they can do so is after March this year. Mr. Thanh, the owner of a car dealership on Pham Hung Street (District 7, Ho Chi Minh City), said that to benefit from the 0% tax rate for cars imported from ASEAN countries, importers must present a certificate of quality for the imported car type, issued by competent organizations abroad.
"As far as I know, only a few large importers have obtained this license so far, mainly for vehicles from Europe. The majority have not yet been granted the certificate. The shortage of vehicles is mainly for newer models, while older models are still abundant because some importers took advantage of importing them from the end of 2017 to 'circumvent' Decree 116," Mr. Thanh explained.
Data from the Ho Chi Minh City Customs Department shows that at Hiep Phuoc port alone, in December 2017, in order to "circumvent" Decree 116, the number of passenger cars with fewer than 9 seats and pickup trucks increased threefold compared to the previous month.
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| With numerous additional costs, imported cars are unlikely to be as affordable as expected. Photo: Thai Nguyen |
Mr. Dang Huu Hiep, Director of American-Style Car Market Company, commented: "A new regulation always has a certain delay; a delay of a few months for a product like a car is completely acceptable. Because the new regulation was clarified at the end of 2017, manufacturers only then placed orders with factories abroad, obtained some new licenses, transported, processed import procedures, inspected, and cleared customs... so it's normal for new models to only be available in April."
Taxes reduced, fees increased, making it difficult to find affordable cars.
Therefore, to buy imported cars with a 0% tax rate, consumers will have to wait until around April of this year. With this tax rate, car prices will drop quite significantly. For example, before January 1, 2018, an imported car declared at a price of $10,000, plus import tax, special consumption tax, and value-added tax, would cost nearly $21,000. After January 1, 2018, the same car would have a total price of nearly $16,000. Thus, the difference compared to before is nearly $5,000.
However, according to business analysts, changes in the calculation of excise tax and other additional costs such as the 10-15% fee for custom-made left-hand drive vehicles compared to the price in the Thai market; fees for obtaining new licenses abroad as stipulated in Decree 116; and inspection fees for each batch of imported vehicles instead of inspecting each type of vehicle as before... will cause the price of vehicles to increase.
A car importer from the European market bluntly stated, "There are no cheap imported cars to wait for." He explained that obtaining an import license under Decree 116 is only the first step. The second step is that to clear customs, the imported cars must have a type approval certificate from the manufacturer, issued by a competent authority in the foreign country. Some manufacturers with factories in Thailand who want to import cars into Vietnam have to order a separate right-hand drive version because Thailand produces left-hand drive cars.
However, the country does not issue certificates for vehicles not sold domestically, causing difficulties for importers. "Many regulations generate additional costs, and the new method of calculating excise tax will make it very difficult for car prices to become cheaper in the near future, even if importers manage to resolve the issue of obtaining type approval certificates from abroad...", this person said.
