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Luxury tax afflicts car sales in April
April was a cruel month for automobile manufacturers as they saw automobile sales drop dramatically from March and the same period of last year.
A report by the Vietnam Automobile Manufacturers’ Association (VAMA) released on May 7 showed that the sales of its member companies decreased dramatically last month. It was attributed to the higher luxury tax which went into effect on April 1.
However, automobile manufacturers are somewhat consoled by the high sales volume in March, 11,316 cars. Nearly all customers who had planned to buy cars made purchases in March in order to avoid the new luxury tax.
As anticipated, the sales of car experienced difficulties after April 1. VAMA’s members in April sold 7,711 cars only, a decrease of 42% from April 2008 and 32% from March 2009.
The sales of SUV/MPVs saw the biggest decrease in comparison with April 2008, 68%, with only 925 vehicles sold. The sales of commercial vehicles decreased by 45% with 4,505 units sold. Meanwhile, only sales of the passenger car line-up increased slightly, by 3%, with 2,281 units sold.
VMC, which is distributing BMW, Kia and Mazda, led automobile manufacturers in sales decrease in April 2009 with car sales down by 61%, followed by Ford, 59%, Honda 55%, Visuco (Suzuki) 46%, GM Daewoo 43%, Toyota 37%, Vinastar and Mitsubishi 24%. Meanwhile, Honda has seen car sales decrease 44% in the last four months, while the rates are 15% for Toyota and 33% for Ford.
Mercedes Benz Vietnam proves to be an exception in that it sold 319 cars in April 2009, an increase of 98% over the same period of last year. The automobile manufacturer also saw sales in the first four months of the year increase by 49% with 1,031 cars sold. This proves to be the only manufacturer which has been able to maintain growth.
In general, the sales of automobile manufacturers in the first four months of the year decreased by 38% over the same period of last year. Especially, the sales of commercial vehicles decreased by 52% over the same period of 2008, passenger car line-up down by 22% and MPV 9%.
The government, in an effort to stimulate demand, has decided to slash the ownership registration tax by 50% on passenger vehicles with less than 10 seats. The policy is hoped will help stimulate demand in the automobile market.
However, car dealers are still not sure about the recovery of car demand in the time to come, as people who planned to buy cars made purchases in March already.
Pham Huyen
vietnamnet
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