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Big changes to car market after April 1
New luxury taxes will become valid as of April 1, 2009, which also spells that car prices will increase after that day. However, many people are still unable to purchase cars at this moment.
Purchase? But pocket empty
Two groups of cars will bear sharp price increases because they will see the sharpest tax increases.
Five-seaters with cylinder capacities of over 3,000 cu m will bear the tax rate of 60% instead of 50% as at present. As such, the retail prices of the models will increase by 7%.
6-9-seaters will also see prices rise with the increases dependent on cylinder capacity.
Models with the cylinder capacities of 2,000 cu m and less will see the smallest price increase of 12% as the tax rate increases by 15% only (from 30% to 45%). Models with the cylinder capacities of over 2,000-3,000 cu m will see the price increase of 15% due to a 20% tax hike (from 30% to 50%). Meanwhile, those with the cylinder capacities of over 3,000 cu m will see the sharpest price increase of 23% as the tax rate will double, from 30% to 60%.
“After April 1, a Land Cruiser 2008 distributed by Toyota Vietnam will see the price increase of $20,000. The price increase will not be a problem for financially capable businesses, but it will be a big problem for private-run small businesses like ours,” the director of a woodwork enterprise in Bac Ninh province said.
While businesses ‘feel easier’ with the car price increases as the cars can be paid by the businesses’ budgets, the price increases would burden individuals and families.
Models which bear sharp price increases all are MPV, which are the models families target.
In principle, people still have time to buy cars prior to April 1. However, not everyone can do that, since it is really difficult to arrange big sums of money for cars at this moment.
Small size cars will be the favourite
While the market of big-size cars with big cylinder capacities now is witnessing a fever before the luxury tax law takes effect on April 1, the market of small size cars remains cool.
While the 7% price increase is expected to occur with cars with the cylinder capacities of over 3,000 cu m, the price level will remain the same for the ones with cylinder capacities of from 2,000 cu m to 3,000 cu m. Meanwhile, buyers of cars with the cylinder capacities of under 2,000 cu m will enjoy the price decrease of 3%.
As such, all small-size models now available in Vietnam like Toyota Corolla Altis, Honda Civic 1.8, Hyundai Getz, Kia Morning and Chevrolet Spark will see a ‘better period’ after April 1.
In fact, though the price decreases of small-size models are relatively insignificant, they are valuable at this moment as all businesses and individuals have to practice thrift. Buyers have been advised to wait a few more days to enjoy the price reductions of several thousand to several hundred dollars.
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The car price changes after April 1 |
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Model |
Cylinder capacity (cm3) |
New tax rate (%) |
Old tax rate (%) |
Impacts on car prices (%) |
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Less than 5 seats |
2,000 and less |
45 |
50 |
Down 3% |
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Over 2,000 – 3,000 |
50 |
Remains the same |
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over 3.000 |
60 |
up 7% |
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6-9 seaters |
Less than 2,000 |
45 |
30 |
up 12% |
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over 2,000 – 3,000 |
50 |
up 15% |
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Over 3,000 |
60 |
up 23% |
VietNamNet, TBKTVN
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