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Friday, July 19, 2024

Vietnam cuts car registration fee by half in early July

The Saigon Times

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HCMC – Vietnam has decided to halve the registration fee for domestically assembled and manufactured automobiles, with effect from July 1, to boost demand and support local automakers.

The Government this morning, June 28, issued a decree lowering the registration fee from 10% to 5% for domestically assembled and manufactured vehicles. Decree 41/2023/ND-CP is valid until the end of December.

This is the third time in the past three years that the 50% reduction in the auto registration fee has been introduced.

Car assemblers and makers in the country expect that this Government decree will stimulate consumption, improve consumer sentiment, and drive sales growth in the automobile market which has experienced declining demand since early this year.

The Ministry of Finance has expressed concerns that the car registration fee cut would lead to a deficit of around VND9 trillion in state budget revenue, as the cuts in 2020 and 2022 resulted in lost revenue of VND16 trillion.

However, some policymakers argue that the impact of this policy may not be the same as the previous cuts due to the current economic circumstances. They point out that many automobile sellers have already launched price cut campaigns, yet demand remains weak.

In May, domestic automobile firms sold only 12,079 units, a 9% decrease compared to April and the second consecutive month of declining sales.

From January to May, only 63,000 cars were sold, down a significant 43% against the same period in 2022, according to the Vietnam Automobile Manufacturers’ Association.

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