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26 June 2009

Tax hike dampens imported car market

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The number of cars imported in the first six months of the year were down 58 percent year on year, reported local online news VietNamNet Bridge, quoting statistics released on June 25 by the General Statistics Office.

Imports of cars with less than nine seats have reportedly dropped by 69 percent over the same period of last year. If considering the value of imports, both cars and car parts have seen the sharp fall of 70 percent.

Meanwhile, the sale of locally-made cars saw the sharp decrease of 35 percent in the first five months of the year over the same period of 2008.

The news website quoted Pham Anh Tuan, Secretary of the Vietnam Automobile Manufacturers’ Association, as saying that the economic downturn and tax hike are the two reasons that the sales of both import and domestically-made cars have decreased sharply.

“The domestic demand for cars remains very high. However, people have delayed their purchase plans as the high tax has made cars more expensive, while the economic downturn has prompted them to tighten their belts.”

According to Tuan, the number of cars sold in the first five months of the year was 38,000 cars, which made the turnover of 16 automobile manufacturers down by 35 percent.

Toyota, which had the best sales, sold 10,000 cars, followed by Ford with 3,500 cars sold. Other manufacturers saw low sales levels with numbers of cars sold down by 50-70 percent from last year.

However, according to Tuan, other countries in the world now have big stocks and offer good sale prices, attracting importers. Therefore, Tuan said, there is every reason to believe that the situation will change in some months.

“In April and May, the numbers of imported cars were higher by 3,000 cars a month, much higher than the imports in the first three months of the year (1,000 cars a month on average). The number of imports will increase soon because the demand for cars has never decreased.”


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