Cars imported to Vietnam enjoy 0% tax: Car prices decrease by 200 million per day
Completely imported cars from the ASEAN region with a 0% tax rate are about to arrive in Vietnam. Dealers immediately offered new car prices reduced by more than 200 million VND. Enterprises expect that by mid-2018, a series of foreign cars from the region will flow into the country at low prices.
The problem has been cleared.
The Vietnam Automobile Manufacturers Association (VAMA) said the Ministry of Transport has accepted the Vehicle Type Approval Certificate, provided by the Thai Government, for vehicles exported from this country to Vietnam.
Thus, the biggest problem that has prevented imported cars from entering Vietnam in recent times has begun to be resolved. Mr. Pham Anh Tuan, Head of the VAMA Policy Subcommittee, said that Thailand is the first country in Southeast Asia to issue a Type Approval Certificate for exported cars and all businesses importing cars to Vietnam have received this certificate.
Immediately after receiving the Type Approval Certificate from the Thai authorities, businesses immediately began importing complete cars. Some sources said that Honda Vietnam has imported a shipment of about 2,000 cars of various types and the goods are about to arrive at the port. According to information from Honda Vietnam, from March 2018, 4 car models including: Accord, CR-V, Jazz and Civic will be imported again, but it will not be until May 2018 that they can be delivered to customers.
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According to Decree 116/2017 ND-CP, imported cars to Vietnam will have to undergo inspection in batches. The time for engine and emission inspection will last from 1-2 months. Thus, if the imported car arrives at the port in March 2018, it will take until May 2018 to have the car to deliver to the customer.
Other businesses such as Ford, Suzuki, GM Vietnam,... are also rushing to import cars from Thailand, in which Pick-up models are prioritized for import during this period.
Following Thailand, businesses are also waiting for Type Approval Certificates from the authorities of Indonesia and Malaysia to import some key car models. According to Mr. Pham Anh Tuan, thus, cars from the ASEAN region will no longer face obstacles when entering Vietnam.
Calculations by businesses show that car models that enjoy a 0% import tax rate will be cheaper than cars of the same type that are manufactured and assembled domestically. In addition to enjoying a 0% tax rate, cars with cylinder capacity under 2.0L also have a 5% reduction in special consumption tax, so the price will also decrease. This is an opportunity for small, cheap car models to penetrate the Vietnamese market in the near future.
Each imported batch of cars has a maximum of 400 cars. Enterprises said they will try to import a large enough batch to reduce inspection costs. Small, cheap, high-selling car models have all been prepared by enterprises to import to Vietnam.
Cheap small cars are coming soon
Toyota will bring in Wigo and Rush - these are two small, low-cost cars that many people are waiting for. Since the end of 2017, Toyota Vietnam dealers have invited customers to place orders to buy the small car Wigo, with delivery in January 2018. The imported Wigo has two versions: manual and automatic. The price of the manual version is about 320 million VND and the automatic version is about 370 million VND.
According to dealers, this is the estimated selling price when the import tax rate for cars from the ASEAN region to Vietnam is reduced to 0% and the special consumption tax is reduced by another 5%, from January 1, 2018. However, this car model was later unable to enter Vietnam due to the regulations on Type Approval Certificates.
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| Lots of cheap imported small cars will flood into Vietnam. |
In addition to the Wigo model, Toyota Vietnam will import the Toyota Rush model. The Toyota Rush is a small SUV, but has both 5-seat and 7-seat versions. The retail price of the Toyota Rush in Indonesia ranges from 18,700 to 20,000 USD.
Honda Vietnam plans to import the BR-V model from Indonesia, which is also a small SUV, sharing the engine with the City model, a competitor of Toyota Rush, with a similar selling price, which will make this segment more diverse.
With the strength of localization, low prices and especially large production scale, car manufacturers from Thailand and Indonesia can easily penetrate Vietnam when import taxes and barriers are removed.
Enterprises expect that by mid-2018, the barriers for imported cars from ASEAN will be removed and they will be imported at low prices. Some car dealers are very excited that by mid-2018, you only need to spend 350-500 million VND to own an imported Japanese brand car in the A and B segment, meeting daily travel needs.
Not only that, banks are also promoting car loans with many incentives. If you buy a car worth 350 million VND, of which you only borrow about 200 million VND, over a period of 3 years, the monthly payment is not large. Therefore, the possibility of "upgrading to a new car" is within reach of many families.
It can be seen that small, cheap cars will be the choice of many car buyers today. This car line is compact, easy to move in narrow streets, suitable for the traffic situation in Vietnam. Moreover, these car models have low operating and usage costs. They are also constantly innovated by manufacturers with fashionable designs.
Faced with this situation, the authorities have taken steps to strictly control imported cars. The General Department of Customs recently issued a document requesting provincial and municipal customs departments to strengthen the inspection of customs values for imported cars.
Many comments show that the tax price for imported cars will be adjusted upwards. With the import tax rate at 0%, increasing the tax price of an imported car by 1,000 USD will increase the price of the car by about 500 USD.
