|
Locally-made cars expecting new price hike wave
It is expected that the prices of locally-made cars will increase considerably as the Ministry of Finance (MOF) has announced it will raise the import tax on car part imports by another 5-10%.
MOF has, for the third time since mid April, decided to raise the import tax on car part imports with the average increase of 5-10% this time.
MOF has, for the third time since mid April, decided to raise the import tax on car part imports with the average increase of 5-10% this time.
Since the MOF increased the tax the second time, the sale prices of cars with 9 and less seats made by foreign automobile manufacturers have increased by 5-8%. Ford Vietnam, Toyota Vietnam, Honda Vietnam and GM-Daewoo have raised sale prices by $100-900. Ford Vietnam has twice raised sale prices, on May 9, 2008 and July 1, 2008.
Automobile joint ventures say that car sale prices will increase sharply when the tax is raised again due to the sharper tax increase compared to the previous two times. Moreover, manufacturers are under heavy pressure from the revaluation of the dollar, which has been making sets of car parts more expensive.
The representative of a Hanoi-based automobile manufacturer said that all of the company’s models will be affected by the tax increase. He said that the models which have car parts imported from non-ASEAN countries will see the sharpest price increases. Meanwhile, the models built with car parts imported from ASEAN countries (which now enjoy the low tax rates of 0-5%) will suffer less.
Manufacturers still have not declared how high the car prices will be. However, analysts say that the price increases will be big. Some manufacturers have not raised sale prices since the first tax increase, but it is certain they will raise prices sharply this time. Some models should see price increases as high as $700/unit.
Mercedes Benz Vietnam’s models, Toyota Camry, Honda Civic and Ford Everest, which have parts imported mostly from non-ASEAN countries, are forecast to see the sharpest increases.
However, not all car models will see the same price increases, even if they are similarly affected by the tax increase. Analysts say that models that are selling well will see bigger price increases. Manufacturers may take advantage of the tax increase to raise sale prices to levels higher than they should be.
Previously, local manufacturers could not set overly high prices on cars because redoubtable rivals were importing the same models. However, as imports have been slowing down due to tax increases, local models seem to have no more rivals.
VNN
|
