Vietnam spends $1.17 billion to import autos

Car imports made a record $1.17 billion in 2009, notable because it comes in a year of economic downturn.

According to the General Statistics Office (GSO) under the Ministry of Planning and Investment, Vietnam imported 76,300 completely built unit (CBU) cars in 2009, worth $1.171 billion, the highest-ever auto import turnover in history.

The number of cars has been increasing steadily over the last few years. In 2007, only 28,000 cars were imported at $500 million, while the figure rose to 50,400 cars in 2008 at $1 billion, and then to 76,300 cars in 2009.

Experts believe that the demand stimulus package has caused the sharp increase of 49.4 percent in quantity and 12.6 percent in import turnover of luxury items in comparison with 2008.

Auto imports have increased since February 2009, when the Government announced the 50 percent value added tax (VAT) decrease. More imports have arrived since May 1, 2009, when the 50 percent reduction in car ownership registration tax was announced.

However, car imports have increased most sharply since August. November witnessed the highest volume of cars imported in 2009, with importers spending $159 million to import 11,500 CBU cars

The imports decreased sharply in December, simply because importers anticipate lower purchasing power for next year, when tax incentives are removed. Only 7,000 cars were imported, valued at $98 million.

Imports have reflected the real situation of Vietnam’s car market and the impact of the tax policies. The imports sold on a massive scale in October and November, when people rushed to purchase cars before the tax incentives end.

A lot of well-known brand names have also appeared on Vietnam’s small market. Vietnam has recently welcomed four new models New Beetle, Passat, Tiguan and Touarg manufactured by German Volkswagen and distributed by World Auto, three US Chrysler’s Chrysler 300C, Jeep Wrangler, Dodge Journey and Nitro distributed by Dong Duong. Besides, Vietnamese consumers now also have the opportunities to own Japan’s Subaru and Italian Fiat’s Alpha Remeo.