Imported car models enjoy 0% tax for Vietnamese customers

Taking advantage of the 0% import tax incentive from 2018, many car manufacturers have adjusted their business strategies from assembling to importing. This is considered a necessary condition for imported cars to reduce prices compared to present.

Honda Civic, new generation CR-V, Toyota Fortuner and many new recruits such as Suzuki Celerio, Honda Jazz, Toyota Avanza all come from two markets with the highest level of localization of components in ASEAN,Thailand and Indonesia. These two countries also led the volume of imported cars into Vietnam in 2017.

According to experts' calculations, import tax alonedown from 30% in 20170% from 2018, car prices may decrease by about 23%. However, the management policy of imported cars and the strategy of each company may make it difficult for car prices to decrease as deeply as expected.

The models below all have in common that they are imported from ASEAN. The price changes can be leverage to improve sales of one model, but also help increase the dominance of another.

A-size hatchback-Mitsubishi Mirage,Suzuki Celerio, Toyota Wigo

Affordable price, suitable for first-time car buyers and service users, Kia Morning and Hyundai Grand i10 dominate the segment that will soon have two formidable Japanese brand competitors.

In 2018, Celerio imported from Thailand and Wigo imported from Indonesia will join the segment.bustling in the past few years in Vietnam. The detailed price and delivery date of both cars have not been officially announced. In particular, the Suzuki model with automatic transmission has a dealer quoting a price of 359 million VND. Competitor Morning is currently selling for 375-390 million VND, Grand i10 380-395 million VND, both are automatic versions.

Brand advantage and resale value may not be strong weapons for Wigo to dominate ineconomy segment, where price and affordable equipment are important factors influencing car purchasing decisions.Both Korean car models are assembled domestically.

C-class sedan-Honda Civic

In terms of benefiting from the 0% import tax from 2018, the expectation for Honda Civic is to have a reduced price to reach a wider range of customers, not to compete in sales with the leading rival Mazda3. Because the current rolling price of Civic is over one billion, quite a difference compared to the rest, which are all assembled domestically.

Facing the strong competitor Mazda3 with neutral design, competitive price (649-740 million) or the former king Toyota Altis (678-905 million) with brand power, Honda Civic needs more breakthroughs, instead of just one version and price approaching segment D as it is now.

Calculations to boost sales are a difficult problem for Honda to avoid conflicts.The philosophy focuses on providing customers with a sporty experience, creating a unique personality in the segment that is the strength of the Japanese car company.

C-class Crossover-Honda CR-V

Not creating a big price gap compared to competitors like Civic, the new generation Honda CR-V imported from Thailand has its own strengths so as not to be too inferior in sales to the Mazda CX-5.

The Japanese car company has not yet announced the detailed price of the new CR-V, the highest version alone is nearly 1.1 billion. MeanwhileHyundai Tucson produced in Ninh Binh costs 760-890 million, Nissan X-Trail manufactured in Da Nang costs 852-986 million. Mitsubishi has just announced the price of the assembled Outlander at 808-1,100 million. Leading the sales segment in 2017, Mazda CX-5 has a new price applied in January 2018 of 869-999 million.

7-seat SUV class D-Toyota Fortuner, Ford Everest, Isuzu mu-X, Mitsubishi Pajero Sport

The 7-seat SUV segment in Vietnam is an unequal competition between the Toyota Fortuner imported from Indonesia and the rest such as the Ford Everest, Mitsubishi Pajero Sport, and Isuzu mu-X imported from Thailand. In addition to the domestically assembled Kia Sorento, the 0% import tax advantage from 2018 is divided equally among these models. Only the Chevrolet Trailblazer has not had an official price and launch date after its last appearance at the VMS 2017 exhibition.

The remaining key point is the strategy of each company plus the tightening import policy of the management agency that reduces the price of cars by how much. The cumulative sales up to November 2017 of this segment shows that in reality, the selling price is not necessarily the decisive factor in the sales race.

Fortuner priced at 981-1,308 million with its brand advantage shows it has no rivals in the segment. Isuzu mu-X priced at 899-960 million struggles at the bottom of the rankings.

Pickup - 7 models

The pickup truck segment in Vietnam has exploded in recent years thanks to tax and fee incentives, convenience, prices under one billion but with rich equipment like passenger cars.Car models distributed to Vietnamese customers are all imported from Thailand, the price reduction is not much because the import tax rate is reduced from 5% to 0%.

Two American pickup trucks, the Ford Ranger and Chevrolet Colorado, are dominating Japanese rivals such as the Mazda BT-50, Toyota Hilux, Mitsubishi Triton, and Isuzu D-max. The Nissan Navara does not announce sales figures.

2018 is a special time for Vietnamese customers, especially for pickup trucks. Instead of how much the price of the car has decreased, their bigger concern comes from the proposal of the Ministry of Industry and Trade to increase the special consumption tax and registration fee for pickup trucks, applied as cars with less than 9 seats.If the above proposal comes into reality, pickup truck prices in 2018 are likely to increase instead of the opposite.

In addition to the above names, the Vietnamese auto market in 2018 has many other ASEAN imported car models that enjoy 0% tax if they meet the condition of a minimum 40% localization of components.

B-class hatchback:Toyota Yaris, Mitsubishi Mirage,Honda Jazz (not yet available).

B-class sedan: Suzuki Ciaz, Mitsubishi Attrage.

MPV: Toyota Avanza, Suzuki Ertiga.

D-class sedan: Honda Accord.

As for newcomers like Toyota Avanza - Innova's younger brother, Honda Jazz, they have not yet set prices and official launch dates in 2018, partly because Decree 116/2017 tightens car import activities, causing car companies to take a long time to bring cars into the country.