Less tax, more cars

Foreign-made cars have been imported in large quantities after the Government lowered the import tax rate.

According to the Vietnam Automobile Manufacturers’ Association (VAMA), local auto manufacturers will only be able to deliver the 10,000 cars they have promised by the end of the first quarter of 2008. A lot of sales agents have refused security money from clients because manufacturers cannot provide timely deliveries.

Mr Thanh Hung, who lives in HCM City’s district 10, wants a 3.5L Camry. A Toyota sales agent told him he would have to wait until early 2008. Instead, he decided to buy an imported car.

He has found out that a Camry 2.4L is being offered for $50,000 and if he pays the deposit now, he can expect delivery in four to five weeks.

Analysts say a lot of customers are now buying imported cars. In the past, imported cars were out of many people’s reach, but are now much cheaper thanks to tax cuts.

Wise buyers should purchase imported cars now instead of waiting so long to get locally made products, they said, adding that locally made products will fall further behind due to increasingly high year end demands. In fact, import prices are just a bit higher than locally made products.

Director of a car import company said that the domestic market has been stimulated by tax decreases and the number of car buyers is increasing as many profit from securities investments and want to own cars.

Analysts say the market will remain hot in the near future as importers still can not meet rapidly increasing demand.

They say more imports will intensify the pressure on local automobile manufacturers, forcing them to lower the sale prices.

Car importers have all announced they will lower sale prices.

The tax decreases have resulted in considerable car price decreases: $2-4,000/unit for BMW models, $1,500/unit for the Hyundai Santa Fe (now selling at $43,400), $5,000 for the Veracruz ($63,500) and $2,000 for a 2007 Toyota Camry.

Currently, medium-class cars are hovering at $50,000/unit, down by $1-4,000.


source: VietNamNet Bridge