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Car prices going two directions
Car prices have been split since the luxury tax law became effective on April 1, 2009. The market segment of small size cars has warmed up, while the MPV segment remains gloomy.
Small size car market warms up
The impacts of the luxury tax law are clearly seen in the market. Unlike the time prior to April 1, the market of small size cars has been very bustling as the lower luxury tax rates have made the cars cheaper.
With the luxury tax down from 50% to 45%, the retail price of small size cars with less than five seats and cylinder capacities of 2,000 cu m and lower have decreased by 2% on average.
Analysts said that the 2% decrease proves to be lower than the impact of the tax decrease, but this has really helped lure more customers.
Representatives of Toyota Motor Vietnam’s sales agents in Hanoi said that since April 1, the number of visitors coming to learn more information and purchase Vios and Corolla Altis has doubled that of February and March.
Sales agents say that though the $500-600 decreases for Vios and $700-800 for Corolla Altis prove to be not really big, they still can attract customers as the prices of other models have all increased.
MPVs facing big difficulties
Unlike the small size car market, the MPV market has become gloomy since the sale prices have been raised.
With the luxury tax rates up by 15%, 20% and 30% from the previous tax rate of 30%, the prices of MPV models, 6-9 seaters have increased by 9-15%.
The models which bear the heaviest impacts from the luxury tax law are the MPVs with the cylinder capacities from 2,000 cu m to 3,000 cu m. With the tax rate up from 30% to 50%, the prices of the models have increased by 12-15%.
These models prove to be the favorites in Vietnam’s market, especially import products. These include best sellers like Toyota Fortuner, Hyundai Santa Fe and Ford Everest.
Meanwhile, the models with cylinder capacities of less than 2,000 cu m have been witnessing more gentle increases, partially because of the slighter tax rate increases and of the previous low prices.
The market of luxury cars with the cylinder capacities of over 3,000 cu m has not seen big impacts, despite the biggest tax increases, because the main clients of the models are high-income earners.
Salesmen say that the clients are businessmen or buyers with good financial capability; therefore, the high price increases will not badly affect the demand for cars.
The number of clients placing orders for MPVs has decreased drastically. Some models have become unsalable. However, some hot models like Toyota Fortuner or Innova still see a lot of buyers.
VietNamNet/TBKTVN
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