Việt Nam auto market expected to recover by year-end
Việt Nam’s automobile market is expected to bounce back in the last months of 2024.
The local automobile market is expected to bounce back in the last months of 2024 if a proposal to cut registration fees by a half for domestically manufactured and assembled cars is approved.
The Ministry of Finance (MoF) has sent a dispatch to relevant agencies to collect their feedback on the continuation of the reduced registration fees which could made effective from August 1 until January 31, 2025.
According to the ministry, domestic automobile manufacturing and assembling enterprises have recorded significant growth in terms of quantity and quality, contributing billions of dollars to the State budget.
However, sales in the first months of 2024 decreased significantly. According to the Vietnam Automobile Manufacturers Association (VAMA), its members sold 108,309 units in the first five months of this year, down five per cent year-on-year.
The MoF said that the proposed reduction this year is essential to stimulate consumption, provide financial support to individuals and businesses and boost the domestic car manufacturing and assembly sector in what is a challenging economic environment.
Since the beginning of this year, many car manufacturers have proactively adjusted selling prices and preferential registration fees not only for domestically assembled cars but also for imported cars. For instance, Hyundai Thanh Cong has adjusted the selling price for its products such as Hyundai Venue, Hyundai Elantra, Hyundai Custin, Hyundai Santa Fe with a reduction from VNĐ20 million to 100 million (US$783-3,920).
However, consumers are delaying their purchases in anticipation that the Government may continue offering reduced registration fees this year, according to insiders.
Car sales in the market witnessed a strong recovery after the MoF implemented a 50 per cent reduction in registration fees for domestically produced and assembled cars in the second half of 2020 and the first half of 2022. Specifically, there were 189,451 vehicles sold in the second half of 2020, an increase of 76 per cent compared to the first half of the year, 33 per cent year-on-year. Meanwhile, auto sales grew by 36 per cent year-on-year to reach 252,932 units in the first six months of 2022.
A VAMA representative said that the reduction of registration fees is necessary given economic difficulties and a decline in car sales due to the impact of the COVID-19 pandemic. Once it is applied, it would not only contribute to supporting the domestic auto industry but also stimulate demand for cars and economic growth. — VNS
