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Locally-made cars to also see price increases
Automobile sales agents say that the prices of locally-made cars will increase as a result of the Ministry of Finance’s decision to raise the car part tax by 5-10%.
Car owners who have brought their cars for maintenance at Honda My Dinh Sales Agent recently said that the staffs of the agent told them that Honda Civics will be VND40mil/unit more expensive due to the higher car part import tax on cars with less than nine seats.
The information about car price increases has also been released by other Honda sales agents in Hanoi. Currently, clients who buy Honda Civics have to sign contracts which stipulate that buyers will have to accept new prices (VND40mil/unit higher at most) set by the manufacturer at the time of delivery if the government’s tax policy changes make the car prices higher.
The Ministry of Finance three times adjusted tax rates on car part imports from mid April 2008 to June 20, 2008. After the first two tax increases, the sale prices of cars with less than 9 seats increased by 5-8%. Ford Vietnam, Toyota Vietnam, Honda Vietnam and GM Daewoo raised their prices by $100-900/unit. Ford Vietnam two times announced price increases, on May 9 and July 1, 2008.
No automobile manufacturer has made an official announcement about price increases after the third tax increase. Honda, Toyota and Ford Vietnam, whom VietNamNet contacted, all said that they had not made a decision about price increases. Meanwhile, sales agents are all talking about price increases, which makes people think that price increases will definitely occur.
Under the decision of the Ministry of Finance, the new tax rate became effective for customs declarations made as of June 20, 2008. Analysts believe that now, half a month after the decision came into effect, is the right time for automobile manufacturers to announce new sale prices.
The analysts say that the tax increase decision will influence nearly all car models. Models which are assembled with car parts imported from non-ASEAN countries will see the biggest price increases, while models assembled with parts sourced from ASEAN countries, which now see a tax of 0-5%, will see lower increases. Only Ford Vietnam has stated that the third tax increase will not greatly affect the costs of their imported car parts.
Mercedes Benz Vietnam, Toyota Camry, Hiace, Honda Civic and Ford Everest, which have car parts mostly imported from non-ASEAN countries, are expected to see the highest increases.
Honda sales agents say that the price of the Honda Civic may increase by $2,200/unit, a very high increase, far beyond a level many people can imagine.
According to the Vietnam Automobile Manufacturers’ Association (VAMA), the sales of all models decreased in May 2008, while the sales of sedans saw the decrease of 7% over April.
VNN
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