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Luxury tax policy put small cylinder capacity cars on top choice
The luxury tax reduction on small cylinder capacity cars is believed to create big changes for the automobile market in the time to come with the rise of small cylinder capacity cars.
The Government has submitted to the National Assembly’s 4th session plan on the luxury tax adjustment. It attempts to slash the luxury tax on vehicles with less than five seats and have the cylinder capacity of 2,000cc from the current level of 50% down to 40%, while planning to raise the tax on over 3,000cc cars from 50% to 60%.
The plan to cut the tax on small cylinder capacity has been applauded by experts who say that the lower tax would bring more opportunities to people to own cars. Experts say it is reasonable to impose a low tax on low capacity cars, since it comes in line with the international practice.
Hearing the news, local automobile manufacturers, are planning to launch small cylinder capacity vehicles to the market (1,500 cc and less).
Daewoo Matiz, the first model with the cylinder capacity of less than 1,000cc sold in Vietnam, has been selling very well in the country. 2,069 Matiz were sold in 2005, while the figures were 940 units in 2006, 1,872 units in 2007 and 2,026 units just in the first nine months of 2008.
Toyota Vios which has the cylinder capacity of 1,500cc, has also been selling well since it was launched onto the market in 2005, selling 2,192 units in that year, 1,581 units in 2006, 2,112 units in 2007, and 2,471 units just in the first nine months of 2008.
Kia Morning model, distributed by the Truong Hai Automobile Corporation, has also been the choice of many Vietnamese people with 600 units sold in the last four months.
Ford Vietnam, which has been well known for its large and sizeable models, also introduced the small capacity model, the Verve 1,300-1,600cc at the recent car exhibition Motor Show 2008, showing its attempt to jump into the small cylinder capacity market segment.
As for import models, Kia Morning, Toyota Yaris, Hyundai Getz or Hyundai i30, Mini Cooper or New Betley prove to be the top favourite models as they are suited for women, while more and more Vietnamese women are driving cars.
In fact, small cylinder capacity cars are still considered the models for women or those who learn to drive. Meanwhile, stylish drivers always like large and luxurious cars.
That explains why the week of driving with Mercedes Benz organized by the manufacturer caught so many attendants, though they had to pay $300 to join the testing drive. According to the manufacturer, 15 clients signed contracts during the week and some 30 clients opened their purse strings later.
Experts believe that the luxury tax reductions on small cylinder capacity vehicles will support the rise of those models. The tax policy will encourage people to use smaller size cars which consumes less fuel and produce less exhaust fumes.
VNN
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