Cheap cars come to Vietnam more after new tax

According to the report of the General Statistics Office, the value of imported cars in the first 8 months is estimated at 1.592 billion USD, equivalent to about 71,000 cars. Compared to the same period last year, the total import value of completely built-up cars in the first 8 months of 2016 decreased by 5.8% in volume and 16.8% in value.

The new excise tax law is having a direct impact, causing the average value of each imported car to gradually decrease.

In August 2016 alone, the estimated number of imported cars reached 10,000 units, a slight decrease of 1,000 units compared to the previous month. Meanwhile, the value of turnover decreased more sharply, from 208 million USD achieved in July to 176 million USD.

If we only compare the last 4 consecutive months, we cannot confirm the trend of the imported car market through the statistics of turnover. However, the numbers are also showing 2 quite clear directions between quantity and value.

For example, the import turnover in June 2016 only reached 9,000 units in quantity while the value reached 248 million USD. In July, the imported car quantity increased to 11,000 units but the value only reached 208 million USD.

This trend is said to be directly influenced by the new excise tax law, with sharp increases in tax rates applied to vehicles with large engine displacement, mainly high-value vehicles, while tax rates remain reduced for vehicles with small engine displacement, mainly low-value vehicles.

For example, the average value of an imported car in June, before the new tax law took effect, was over $27,500. Meanwhile, the average value of an imported car in July, since the new tax law took effect, quickly dropped to over $18,900. The value of each imported car in August also continued to fall, averaging only $17,600.

Import turnover of completely built-up cars in the last 4 months

Quantity (pieces) Value (USD)

May 2016 12,000 236,000,000

June 2016 9,000 248,000,000

July 2015 11,000 208,000,000

August 2016 (estimated) 10,000 176,000,000

2016 (estimated) 71,000 1,592,000,000

Source: General Statistics Office

According to VnEconomy