Pickup trucks enjoying 0% import tax return to Vietnam

A shower of rain after the dry season

With most models imported from Thailand, pickup trucks are considered one of the automobile segments that are most affected after Decree 116 of the Government and Circular 03 of the Ministry of Transport (MOT) were officially issued.

New regulations on paperwork procedures for importing complete cars as well as tightening inspection of emission standards and technical safety for each batch of cars... have invisibly created barriers that have caused pickup trucks to be "stuck on the way back" since the beginning of 2018.

The stock of goods from the end of 2017 gradually depleted, car manufacturers participating in this segment fell into a situation where they did not have enough supply to meet market demand. The consumption of pickup trucks also continuously decreased accordingly. From an average sales of more than 2,000 vehicles/month, the total number of vehicles sold in Vietnam dropped to a record low, down to 349 vehicles in April 2018. In particular, the consumption of Ford Ranger decreased to only a few dozen vehicles, Nissan Navara was out of stock, Toyota Hilux even had no vehicles to sell... This situation caused many car manufacturers to cut promotions that were applied regularly every month for pickup trucks to salvage revenue in the face of declining sales. Ford dealers even increased the selling price of Ranger.

However, since May 2018, optimistic signals from the import activities of automobile enterprises are contributing to the formation of the first showers of the season, dispelling the dry days in the pickup segment. Up to this point, most of the enterprises importing cars from Thailand have obtained the quality certificate of the car type according to regulations. This is considered a premise for Toyota, Nissan, GM, Mitsubishi or Ford... to bring pickup models back to the Vietnamese market. According to statistics from the General Department of Customs, in the last 2 weeks of June 2018, there were about 1,816 cars registered for import declaration, including 921 trucks.

Currently, GM is considered the first unit to mark its return to the pickup segment after completing import procedures and customs clearance for a batch of Chevrolet Colorado cars in early May 2018. Meanwhile, Toyota's Hilux model has recently arrived at the port to wait for customs clearance. According to the Japanese car company's plan, the new versions of Hilux will be available on the market by early August 2018 at the latest. In addition, if there are no obstacles, the first batch of Ford Ranger and Nissan Navara cars subject to 0% import tax will be available in Vietnam in August 2018. Meanwhile, according to a representative of Mitsubishi Vietnam, the company's imported car models, including the Triton pickup, will be brought in in the next 2 months.

Car prices do not decrease

The return of pickup trucks has brought some optimism to the business activities of car manufacturers, contributing to relieving the "thirst" that is happening in the market. However, even when all factors are met to enjoy 0% import tax, the selling price of pickup trucks is unlikely to decrease as deeply as consumers expect. Because, before 2018, pickup trucks entering Vietnam were only subject to an import tax of 5%.

The current reality shows that the first pickup truck models arriving in Vietnam have not only not decreased in price but also increased by tens of millions of dong. Specifically, the 5 versions of the Chevrolet Colorado line arriving in May 2018 all maintained the same price from 624 to 839 million dong. Customers buying this pickup truck line only receive incentives according to the monthly promotion program of the company and distributors.

Meanwhile, after a long hiatus, Toyota Hilux officially returned with 3 versions. The selling price of this pickup truck line was announced by Toyota Vietnam at 695 - 878 million VND. Compared to the old price, the Hilux 2.4 MT 4x4 version increased by 18 million VND, the Hilux 2.4 AT 4x2 version increased by 22 million VND. However, Toyota has added safety features to support the driver and upgraded the design appearance of the Hilux 2018. As for Nissan Navara, some authorized dealers of Nissan in Ho Chi Minh City said that this pickup truck still retains the listed price as well as the 6 versions previously sold in the Vietnamese market.

With the actions of businesses, it can be seen that pickup trucks enjoying 0% import tax returning to the Vietnamese market in the near future will hardly be able to reduce prices as expected by consumers.