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Car importers still contrive to bring luxury cars to Vietnam
Car importers have admitted that with the newly released regulations on car imports management, it is very difficult to bring luxurious cars to Vietnam. However, they do not intend to “give up the games.”
The luxury car market in Vietnam has become very bustling over the last few years. Though Vietnam has just escaped from the list of poor countries, the demand for luxurious cars has been increasing significantly among billionaires and high income earners. A lot of luxury brands have joined Vietnamese market, while hundreds of original cars made to orders have been flocking to Vietnam.
However, experts believe that many changes will occur in the luxury car market after the promulgation of Circular 20 with very strict rules which car dealers believe aims to install a technical barrier to the cars to be imported from non-official sources.
The new regulation, as explained by the Ministry of Industry and Trade, aims to help “clean” the car import market, because it will only allow genuine cars to be imported with full standard post-sale services.
The Vietnamese luxury car market has gathered many well known names, including Audi, Mercedes, BMW, Porsche or Land Rover. The brands are believed to have the greatest potentials to conquer the market, while many Vietnamese traders have applied for acting as the authorized distributors of the brands in Vietnam.
A question has been raised that what car importers, who have been importing products from non-official sources, will do in the new circumstances. Distributing the products with the above said brands proves to be unfeasible, because no luxury manufacturer allows the existence of two official distributors on the same market.
A lot of car dealers have admitted that they see very few opportunities to continue their business. If they do not have the opportunities to import the cars whose manufacturers have representatives in Vietnam already, they will have to cooperate with other manufacturers. But what brands should they join hands with, then?
As said above, the brands with great potentials which promise lucrative profits in the Vietnamese market have cooperated with other partners already. How about the super car brands such as Rolls Royce, Maybach, Ferrari, Lamborghini, Lotus, Bentley, Aston Martin or Maserati?
In principle, the doors of the manufacturers have been kept open to all. However, luxury car importers say that it is very difficult to persuade the giant choosy manufacturers to obtain the contracts to become authorized distributors, the work which is described as “moving mountains.”
In fact, the luxury manufacturers only churn out products in limited quantities. Even the millionaires in the world have to place orders with the manufacturers and wait for deliveries. Therefore, it would be unnecessary for them to set up distributors which require a lot of complicated procedures.
There are still other luxurious, but more popular brands, including Acura, Lexus, Cadillac, or Lincoln. However, before thinking of joining hands with the brands, enterprises have no other choice than waiting for the parent groups that own the brands shut down their joint ventures and call their representatives back. They are Honda (Which owns Acura), Toyota (Lexus), GM (Cadillac) and Ford (Lincoln).
In the eyes of car dealers, the situation is even more serious in the used car market. On June 29, the Prime Minister released a decision on a new method of calculating tax on used car imports.
The noteworthy thing is that the government has not only raised the fixed tax rates sharply, but has also applied a new tax calculation method. For example, used passenger cars with less than 10 seats with the cylinder capacity of 1.5L-2.5L will bear the tax to be calculated by the formula: X + 5000 dollars, while the cars with the cylinder capacity of 2.5L and more will be X + 15,000 dollars.
Analysts have pointed out that with the new tax calculation method, the import tax on used luxury cars with the cylinder capacity of 5.0L will be much higher than the tax imposed on brand new cars of the same kind. Once the tax on used cars exceeds the tax on brand new cars, no one would be foolish enough to import used cars any more.
vietnamnet, TBKTVN
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