The temporary 50 per cent cut in registration fees for locally-made cars starting from June 2020, which aimed to encourage domestic production through the global health crisis, may not extend into 2021, thus carmakers are hoping for new benefits in order to build on recent sales momentum.
The fee cut for locally-assembled or produced cars boosted 2020’s car sales, which suffered under the impact of COVID-19. Previous to the temporary regulation, buyers of cars with fewer than nine seats in Vietnam were subject to a 10 per cent registration fee, or 12 per cent for residents of Hanoi – rates now expected to be reinstalled as the year ends.
According to the Vietnam Automobile Manufacturers Association’s November report, sales of automobiles reached 36,359 units in October, up 9 per cent on-month and 22 per cent on year. Among that, 7,122 commercial cars were sold, down 5 per cent on-month, while sales of passenger and special-use vehicles topped 28,755 and 482 units, rising 13 and 25 per cent on-month respectively.
Locally-assembled cars come from automakers with many domestic and assembled models such as Truong Hai Auto Corporation, Thanh Cong, and VinFast; as well as from foreign players that assemble their cars in Vietnam, like Toyota, Peugeot, and Mercedes-Benz, all of which benefit as customers move to localised models. Automakers are also increasing their capacity, such as Toyota Vietnam with its new Vios and Fortuner models, Hyundai Thang Cong with its Grand i10, and Kia with its Seltos, among others, in order to respond to the rising demand of customers who want to buy a car before the end of the year.
Overall, the auto market has been bustling, with new models being launched simultaneously. Toyota Vietnam launched the three new models of the Cross, Hilux, and Fortuner; Kia offers the Seltos and Sorento; and Honda Vietnam just launched the upgraded CR-V, while Mazda presented its new Mazda 6.
Besides this, to compete with locally-manufactured cars, many car importers also offer half-price reduction in registration fees with some models, such as from Volkswagen, even offering a full imbursement of such fees.
The positive momentum has driven sales in October and November, hitting a record 22 per cent growth on-year, while sales of aforementioned popular models that have attracted customers previously continued to grow. Most of the cars are also included in the list of the top 10 best-selling cars in Vietnam in October and November. With just over 11,000 sold vehicles, Hyundai Thang Cong became the best-selling car distributor in Vietnam in November, followed by Toyota Vietnam with 9,444 units, Kia with 6,260 units, and Mazda with 4,369 units.
Last week at the Vietnam Business Forum, which facilitates high-level public-private policy dialogue with key decision-making government figures, associations, and investors, it was noted that when the 50 per cent reduction on registration fees for locally-assembled modes ends in December, the government should apply the same registration tax reduction to mild hybrid, hybrid, and fully electrical vehicles in 2021 for three years in order to support development of the automobile industry, and aid the country’s commitment to a cleaner society.