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How high car prices should be after April 1?
Buyers are rushing to buy cars at this moment in order to avoid the car price increases which are sure to happen with the luxury tax increases.
Car prices skyrocketing
In fact, people were informed previously that the luxury tax law would become effective on April 1, 2009. However, they still hoped that the law would be delayed after automobile manufacturers, distributors and consumers many times asked for the tax to be pushed back.
Finally, consumers have been informed that the luxury tax will still go into effect on April 1 as previously scheduled, and they have been rushing to purchase cars in order to avoid price increases.
As people are rushing to purchase cars, the market has become chaotic. Buyers have been asked to pay additional fees if they want to get cars soon.
A lot of 6-9 seater models have seen a supply shortage. A salesman related that even Chevrlolet Vivant, the model which was considered the most unmarketable model in the last time, has also been nearly exhausted.
Toyota’s Fortuner, a model launched onto the market one month ago, has caught the special attention of the market these days.
When marketing Fortuner, Toyota Vietnam planned to sell some 150 cars of the model a month. However, just one month after the model was marketed, Toyota Vietnam’s representative on March 22 said that the number of Fortuner buyers had been 11 times higher than expected.
To date, 700 cars have been delivered to clients, while buyers have deposited money on 900 other cars.
Toyota Vietnam has admitted that some sales agents asked clients to pay additional fees in order to get deliveries before April 1. A Thoi bao kinh te Vietnam reporter, who called a sales agent to ask about the price of a 2.7L petrol engine Fortuner, was asked to pay $2,000 extra to get early delivery.
Still a mystery
The highest price increases (30-60%) are expected to come on the models with the cylinder capacities of over 3,000 cm3 due to the 30% tax increase. Sharp price increases will also take place with the models of 2,000-3,000 cm3 due to the 20% tax increase, from 30% to 50%. Meanwhile, the models with the cylinder capacities of under 2,000 cm3 will bear the tax rate of 45% instead of 30%.
It would be very easy to calculate how high the sale prices should be with the anticipated tax rate increases. However, to date, most automobile manufacturers have refused to give details about new prices.
Observers say that no manufacturer has given expected prices yet because they still have to watch each other, especially the manufacturers that have similar products which could be direct rivals.
Automobile manufacturers admit that sale prices prove to be a very sensitive story in Vietnam’s market. Therefore, the price gap of a few percent would be enough for a manufacturer to defeat others.
Some months ago, when launching the diesel engine Chevrolet Captiva onto the market, GM Daewoo Vietnam did not announce the manufacturer’s suggested retail price until two weeks later, when Toyota’s Fortuner appeared on the market.
The Vietnam Automobile Manufacturers’ Association has still been insisting on a delay of the luxury tax implementation even though the Ministry of Finance released the document guiding the implementation of the luxury tax law.
VietNamNet/TBKTVN
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