HANOI (Xinhua): Vietnam's trade regulators are mulling over measures to spur consumer demand for cars and revive faltering auto sales, including lower registration fees, Vietnam News reported on Monday (May 29).
The plan in consideration came as worries that the country's auto market would shrink this year on an economic slowdown grew.
Vietnam's car market has been hit hard in recent months by an economic downturn, which has spread to financial markets, real estate and export-driven manufacturing.
Auto sales have declined significantly as many buyers back out, Savico, the largest automobile distributor in Vietnam, told VnExpress.
Car manufacturers recorded a drop of 19.3 per cent in their production in the first four months of the year, said the Ministry of Industry and Trade in a report, adding that local businesses maintained a quite high inventory accumulation.
According to the Vietnam Automobile Manufacturers' Association (Vama), Vietnam's auto industry production and sales dropped sharply in April from the previous month, suggesting sluggish demand for vehicles in the country.
Retail sales of new vehicles by Vama member-manufacturers slipped 39 per cent to 50,017 units in the January-April period from a year ago, while sales of imported cars fell 16 per cent to 42,784 units.
Total industry sales for passenger cars in the first four months of the year slumped 30 per cent to 92,801 units from the year-earlier period, of which commercial vehicles sales contracted 9 per cent, tourism vehicles sales dropped 35 percent and special-purpose vehicles sales tumbled 58 per cent.
Auto dealers have called on the government to halve registration fees and extend special consumption tax payment deadlines for locally-manufactured vehicles to revive the market growth.
Besides, as Vietnam has been pushing for wider use of electric vehicles in attempt to meet its commitments to net-zero carbon emissions by 2050, such support measures could boost consumer demand for electric vehicles, said the SSI securities.
However, the finance ministry is concerned that government budget revenues would sag following a 50-per cent reduction in registration fees for cars, citing the previous cut, effective from December 2021 to May 2022, which translated into over 9 trillion dong (US$380 million) in lost tax revenues.
