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Trucks to witness massive price increases
It is expected that the prices of commercial vehicles will increase after January 1, 2009 due to the higher VAT tax rate, 10% instead of 5% as currently applied.
Under the VAT Law, approved by the National Assembly on June 3, 2008, which goes into effect on January 1, 2009, commercial vehicles (trucks and buses) will be imposed a 10% VAT. The VAT tax increase is believed will cause sale prices to increase.
In fact, manufacturers do not want price increases. For the last many months, commercial vehicle manufacturers have seen sales down sharply due to the big difficulties of the national economy. The purchasing power has decreased sharply, while input material prices have increased. The difficulties have been bolstered by the fact that banks have tightened credit, which has led to the sharp decrease of individual clients.
Statistics released by the Vietnam Automobile Manufacturers’ Association VAMA showed that the sold units of five of the six of commercial vehicle manufacturers in August decreased sharply in August over July. Truong Hai saw the biggest decrease of 36% (361 units), Vinamotor 13.6% (173 units), Vinaxuki 16% (84 units), Hino 30% (90 units), and Samco 20% (2 units).
Nevertheless, manufacturers hope sales will improve in the last months of the year thanks to the forecast recovery of the national economy. The demand of individual clients is expected to increase considerably as they are believed will try to buy trucks before January 1, 2009, before the higher tax policy is in effect.
“Sales have improved in the last two weeks, and are expected to increase towards the year’s end before stabilising in the first quarter of 2009,” said Bui Thanh Xuan, Deputy Director of Vinaxuki.
Vinaxuki has announced it will pay for the ownership registration fee of 2% of vehicles’ values.
VNN
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