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Carmakers anticipate 20% drop in sales
The Viet Nam Automobile Manufacturers' Association (VAMA) says it anticipates sales of its member companies to fall by 20 per cent this year as a result of high registration tax and many other fees.
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| An automobile display area in Ha Noi's Cau Giay District. The Viet Nam Automobile Manufacturers' Association predicts a 20-per-cent decline in dealer sales this year. |
The association claims that the automobile market has frozen after the car ownership registration tax increased to 20 per cent in January this year. The fees for getting a number plate has also increased to VND20 million (US$950).
Many other fees would apply in June as proposed by the Ministry of Transport.
GM Viet Nam sold only 550 cars in January 2012, 50 per cent of the sales in December 2011. Ford Viet Nam sold 500 units the same month, as opposed to 1,100 in December. During the same period, Toyota Viet Nam sold 1,520, a dramatic drop from 2,574.
On average, domestic automobile makers have seen sales dropping by 40-50 per cent.
The sharp fall in the sales is a big worry for local carmakers, particularly as this trend looks to continue in the coming months.
Analysts have warned that 2012 would be another difficult year for a number of car makers as the economic doldrums forces people to cut down on their spending.
Meanwhile, many commercial banks have said they would restrict loans for car buyers, while others have said they would provide car loans at rates of up to 23 per cent per year.
Akito Tachibana, General Director of Toyota Viet Nam, said the economic downturn, the tightening of monetary policies and the Vietnamese dong/ US dollar rate fluctuation would also have negative impacts on the automobile market this year.
Several foreign invested automobile manufacturers have said if the sales are too slow, they would consider scaling down production and cutting down the labour force.
Pham Anh Tuan, VAMA secretary general, said once the automobile join ventures cut down production, a lot of jobs would be cut, which would have a domino effect on car parts providers in Viet Nam.
Tuan noted that veteran workers would be the first to be laid off.
Therefore, VAMA has petitioned the Government to consider delaying the personal vehicle fees proposed by the Ministry of Transport.
According to the Ministry of Industry and Trade, total investment capital in the country's automobile industry has reached $1.8 billion. The industry has created more than 60,000 direct and indirect jobs and contributes about $2 billion to the State budget every year.
Motorbike imports fall
The number of imported motorbikes decreased by nearly half in the first quarter of this year compared to the same period last year, according to the General Statistics Office.
The office reported that the country spent $6 million importing 4,000 units in March, bringing the total import volume of the first three months to 13,000 units worth $21 million, down 47.7 per cent in volume and 41.6 per cent in value.
Imported motorbikes started a downward trend in October of last year when for the first time only 4,000 units worth $7 million were imported due to economic difficulties and fierce domestic competition. The imports plunged to 3,000 units worth $4 million in February, a one-year low record.
It was forecast that motorbike imports in the coming months would continue this decreasing trend, especially after the Government's road maintenance fund takes effect this June. Under the new regulation, every vehicle, including motorbikes, will have to pay annual road use fees.
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