Vietnamese told not to expect high-end cars to become cheaper

Asked about the import tariff on luxury cars from Europe after the EVFTA takes effect, the Ministry of Industry and Trade (MOIT) said the competitiveness of EU sourced cars would improve.

According to MOIT’s Deputy Minister Tran Quoc Khanh, high-cylinder capacity cars (more than 2500 cc) will see tariffs gradually cut to zero percent after nine years.

Vietnamese told not to expect high-end cars to become cheaper

Meanwhile, the tariff cut for less than 2500 cc cars will be implemented over 10 years, and the roadmap for car parts will be seven years.

Cars imported from Europe are mostly luxury models.

At present, cars from the EU bear a high tax rate of 70 percent. The selling price is 2-3 times higher than the original price because the cars bear many kinds of taxes and fees.

 

The trade agreement includes an important provision that, five years after the agreement takes effect, Vietnam will accept the EU quality certificate, which means that the EU’s cars won’t need quality certificates to enter Vietnam. This means that Vietnam will create more favorable conditions for EU cars to penetrate the Vietnamese market.

However, analysts said they still cannot predict the attractiveness of European cars in the Vietnamese market. Most Vietnamese are familiar with popular brands such as Hyundai, Kia Morning and Toyota. The tariff cuts on European cars are not expected to have much effect on the home market.

At present, cars from the EU bear a high tax rate of 70 percent. The selling price is 2-3 times higher than the original price because the cars bear many kinds of taxes and fees.

According to Dang Dinh Dao from Hanoi Economics University, it is highly possible that the Ministry of Finance, under pressure because of the scanty budget, may think of solutions to raise domestic taxes and fees to offset the tax collection reduction to be caused by tariff cuts.

He also stressed that the government has shown clearly that it will create the most favorable conditions to develop the domestic automobile industry. This means that automobile joint ventures and Vietnamese owned manufacturers will continue receiving support to develop.

As such, not only imports from Europe, but also from the US and Japan, will meet barriers imposed by Vietnam to restrict imports into the Vietnamese market. And once Vietnam raises domestic taxes and fees, the price of luxury cars will not likely decrease.

As for CPTTP, 11 member countries will cut the import tariff to zero percent on industrial products, including cars.

However, car dealers said even after the tariff is cut, Vietnamese will not have good prices as expected.

Le Hoang Tung, the owner of a car salon in Tan Binh district, HCMC, said the tariff on ASEAN imports has been zero percent since January 1, 2018, but the prices of imports from the market have remained unchanged.

Mai Thanh 

Vietnam’s automobile market to be flooded with zero-tariff ASEAN cars

Vietnam’s automobile market to be flooded with zero-tariff ASEAN cars

The car sales in Vietnam are forecast to reach 500,000 units per year in 2020 and 1 million per year by 2030, with a turnover of US$12 billion each year.  

Vietnamese Generation Z seeks career mentoring on social media

Vietnamese Generation Z seeks career mentoring on social media

Social media platforms have outpaced other channels including schools, friends and traditional media to become the leading source for job finding.

 
 

Other News

.
Chubb Life Vietnam honored 'Top Insurance Workplaces 2020'
Chubb Life Vietnam honored 'Top Insurance Workplaces 2020'
BUSINESSicon  14/09/2020 

Insurance Business Asia, a world-renowned insurance publication, has just named Chubb Life Insurance Vietnam Company Limited (Chubb Life Vietnam) among the “Top Insurance Workplaces 2020” in Asia.

Lam Dong halts agricultural tourism projects
Lam Dong halts agricultural tourism projects
TRAVELicon  13/09/2020 

Despite keen interest from businesses to invest in agricultural tourism in the Central Highlands province of Lam Dong, the provincial government is not granting an approval to such projects for the time being.

Vingroup rejects rumour about selling stake in Vinmec and Vinschool
Vingroup rejects rumour about selling stake in Vinmec and Vinschool
BUSINESSicon  13/09/2020 

Vingroup rejects rumour about selling its stake in Vinmec and Vinschool, reiterating that these two systems play a crucial role in the group’s ecosystem.

Hotel rates down steeply as COVID-19 keeps away tourists
Hotel rates down steeply as COVID-19 keeps away tourists
BUSINESSicon  12/09/2020 

The hotel industry is facing arguably its greatest challenge as the impacts of COVID-19 keep away foreign visitors from the country.

MPI prepares new decree on SOE information disclosure
MPI prepares new decree on SOE information disclosure
BUSINESSicon  12/09/2020 

The Ministry of Planning and Industry (MPI) is developing a new decree to guide State-owned enterprises (SOEs) on disclosing information, aiming to...

Vietnam likely to gain export target for timber and wooden products this year: experts
Vietnam likely to gain export target for timber and wooden products this year: experts
BUSINESSicon  12/09/2020 

 Experts believe Viet Nam this year will reach its export target for timber and wooden products at US$12 billion, despite the impact of the COVID-19...

VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 13
VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 13
BUSINESSicon  13/09/2020 

Vietnam home to nearly 50,000 rooftop solar projects

Vietnam's energy sector a magnet for foreign investors
Vietnam's energy sector a magnet for foreign investors
BUSINESSicon  11/09/2020 

National electricity demand is expected to increase by 8.5 per cent a year until 2025 and 7 per cent until 2030, making Vietnam an attractive market for foreign energy investors.

Ministry asks for tightened management on condotels, officetels, shophouses
Ministry asks for tightened management on condotels, officetels, shophouses
BUSINESSicon  12/09/2020 

The Ministry of Construction has asked provincial and municipal people’s committees to tighten management on condotels, officetels, resort villas and shophouses 

Auto industry steers strategy towards wider supply chains
Auto industry steers strategy towards wider supply chains
BUSINESSicon  11/09/2020 

Vietnam’s automobile industry is transforming drastically but it still lacks scenarios to join the global supply chains after the COVID-19 pandemic.

VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 12
VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 12
BUSINESSicon  12/09/2020 

Vietnam recovery prospects brightest in Southeast Asia: ICAEW

Versatility letting retail grow anew
Versatility letting retail grow anew
BUSINESSicon  10/09/2020 

The local retail sector is set to maintain its encouraging growth towards the end of the year, with new drivers coming online.

Anxious carmakers hoping losses remain in rear mirror
Anxious carmakers hoping losses remain in rear mirror
BUSINESSicon  10/09/2020 

Despite efforts in converting part of their facilities to produce ventilators and face masks for fighting the coronavirus pandemic, global carmakers are still reporting losses 

Vietnam's current account forecast at 3.7% in 2020
Vietnam's current account forecast at 3.7% in 2020
BUSINESSicon  10/09/2020 

Vietnam’s current account surplus could narrow to 3.7 per cent in 2020 from 4.9 per cent last year due to the impacts of the COVID-19 pandemic, according to Fitch Solutions.

Trade plummets at HCM City’s wholesale markets after second COVID-19 outbreak
Trade plummets at HCM City’s wholesale markets after second COVID-19 outbreak
BUSINESSicon  10/09/2020 

Wholesale markets in HCM City are facing a serious crisis due to the second COVID-19 outbreak. 

Businesses race against the clock to issue bonds
Businesses race against the clock to issue bonds
BUSINESSicon  11/09/2020 

Large corporations are rushing to seek capital through bond issuances before a new regulation, with stricter requirements, takes effect.

VN farm produce prices plummet amid oversupply, impact of Covid-19
VN farm produce prices plummet amid oversupply, impact of Covid-19
BUSINESSicon  11/09/2020 

Booth avocado, the specialty of Dak Lak province, is now selling at VND10,000-20,000 per kilogram, and the price of passion fruit has also fallen dramatically.

Fruit exports to China fall, but are offset by more exports to Thailand
Fruit exports to China fall, but are offset by more exports to Thailand
BUSINESSicon  10/09/2020 

China has reduced fruit imports, but Thailand has been buying more from Vietnam.

Smartphones 'determine the fate' of VND-billionaire farmers
Smartphones 'determine the fate' of VND-billionaire farmers
BUSINESSicon  12/09/2020 

Over the last 10 years of developing farming chains and observing strict requirements, farmers who have earned annual incomes of billions of dong have been increasingly using digital technology.

Probus Opportunities & Digi Ventures invest in Vietmoney
Probus Opportunities & Digi Ventures invest in Vietmoney
BUSINESSicon  10/09/2020 

Vietnamese pawn chain operator Vietmoney has closed its series A funding round with Probus Opportunities (Probus) and Digi Ventures (DV). Probus and DV will hold a combined 30% stake in Vietmoney and both shall join the Board of Directors.

 
 
 
Leave your comment on an article

OR QUICK LOGIN