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Car imports down sharply because of tax hike
The number of cars imported in the first six months of the year is just 53 percent of that of the same period of last year. This has been attributed to the higher tax, resulting in lower demand.
The statistics released on June 25 by the General Statistics Office showed that the value of imported cars in June was 58 percent lower than in June last year.
Imports of cars with less than nine seats have reportedly dropped by 69 percent over the same period of last year. If considering the value of imports, both cars and car parts have seen the sharp fall of 70 percent.
Meanwhile, the sale of domestically-made cars saw the sharp decrease of 35 percent in the first five months of the year over the same period of 2008.
Pham Anh Tuan, Secretary of the Vietnam Automobile Manufacturers’ Association, said that the economic downturn and tax hike are the two reasons that the sales of both import and domestically-made cars have decreased sharply.
“The domestic demand for cars remains very high. However, people have delayed their purchase plans as the high tax has made cars more expensive, while the economic downturn has prompted them to tighten their belts.”
According to Tuan, the number of cars sold in the first five months of the year was 38,000 cars, which made the turnover of 16 automobile manufacturers down by 35 percent.
Toyota, which had the best sales, sold 10,000 cars, followed by Ford with 3,500 cars sold. Other manufacturers saw low sales levels with numbers of cars sold down by 50-70 percent from last year.
However, according to Tuan, other countries in the world now have big stocks and offer good sale prices, attracting importers. Therefore, Tuan said, there is every reason to believe that the situation will change in some months.
“In April and May, the numbers of imported cars were higher by 3,000 cars a month, much higher than the imports in the first three months of the year (1,000 cars a month on average). The number of imports will increase soon because the demand for cars has never decreased.”
In related news, among the nine main import items, which make up 81 percent of total import turnover, besides automobiles, other items also saw sharp falls in import turnover in the first five months of the year, including music disks and mobile phones. Meanwhile, imports of household electronics products increased by 106 percent. This shows that Vietnamese consumers have shifted to use essential products instead of luxury ones.
The Ministry of Planning and Investment on June 24 announced the trade deficit in the first six months of the year at $2.1 billion and the trade deficit of nearly $1 billion in June alone. The $2.1 billion worth of trade deficit is considered a big figure in the context of economic downturn, when businesses do not plan production expansion.
The import turnover in the first six months of the year was $29.7 billion, while the export turnover was $27.6 billion.
Phan Hung
vietnamnet
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