The automobile market is expected to boom this year as the Government mulls a number of favourable policies to help reduce costs, improve demand and increase output.
Many favourable policies are proposed to improve the competitiveness of the domestic auto industry. (Photo: vietnamnet.vn)
Last November, a specialconsumption tax policy was proposed by the Ministry of Finance to reduce orwaive the tax on domestically made car components, which can help reduce costs.
Meanwhile, a proposal toincreasing the tax on certain types of vehicles was also made last year, whichis expected to increase the prices of imported cars if it is approved.
The Ministry of Industry andTrade (MoIT) has also proposed other policies such as lowercorporate income tax for the auto industry and its supportingindustries.
There are also favourablepolicies on the cards for manufacturers of cars with nine seats or fewer, acapacity of more than 50,000 vehicles a year and able to export within fiveyears. They include waiver of land rentals and usage fees, financial aid fortechnology transfer and access to low-interest loans.
The MoIT and the StateBank of Vietnam have also been considering policies to increase demand forcars, such as lower loan interest rates for buying domestically produced cars.
Production of cars in thecountry has been increasing since last year, with Truong Hai Auto Corporationexpanding the capacity of its KIA car manufacturing plant from 20,000 to 50,000a year and TC Motor's new factory slated to be completed this year with acapacity of around 100,000 cars.
Other companies such as Fordand Toyota have also expanded their capacity.
Inspections of imported carswill be less stringent, changing from for each batch of imports to particularmodels. Each model would need only one vehicle tested for emissions and safety.
According to the MoIT, thegrowth of the auto market has been better than expected in recent years, with arate of 20 - 30 percent a year.
In 2020 around 450,000 -500,000 cars are expected to be bought in Vietnam, up from 400,000 units lastyear./.VNA
Members of the Vietnam Auto Manufacturers’ Association (VAMA) reported a year-on-year sales surge of 12 percent in 2019, riding on hefty festive discounts and promotional programmes.
The high production costs, taxes and fees all make automobile prices in Vietnam much higher than in other countries in the region.