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Buyers favoring smaller, imported cars
Nearly 50,000 vehicles were imported to Vietnam in the first nine months of 2009 – analysts say that’s an oversupply. MOIT wants to raise tariffs.
According to the General Statistics Office (GSO), car imports peaked at 8,700 units in July, valued at $118 million, but decreased to 7,300 in August, worth $107 million.
Vietnamese importers spent $632 million to import 39,600 vehicles, both new and used, in the first eight months of the year.
GSO estimates that the car imports will reach 46,900 vehicles by the end of September, reaching a total value of $737 million. If so, the 2009 over 2008 figures will show an 11 percent in value but a 3.5 percent increase in quantity, indicating that small size, lower cost cars have won consumer favor.
A new luxury tax that went into effect on April 1 imposes lower taxes on cars with smaller engines.
A car importer explained the August decrease in cars imported by commenting that a new-to-market importers were encouraged by the ‘warm’ market. Then, sensing impending oversupply, they hit the brakes in August to avoid taking losses.
The same source said importers are trying to lure customers by cutting prices rather than hold cars in inventory.
The Vietnam Automobile Manufacturers’ Association (VAMA) has expressed concern to the Ministry of Industry and Trade that the ratio of imports vis a vis cars assembled in Vietnam increased from 18 percent in February to 39 percent in July.
MOIT is reportedly consulting other agencies on a proposal to raise the import tariff from 83 percent to 91 percent on imported autos. However, the Ministry of Finance is said to believe that it would not be wise move to raise tariffs at a moment when Vietnam needs to stimulate consumer demand.
VietNamNet, VnMedia
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