Car import doubles but future uncertain

Viet Nam imported over 6,000 cars this January reaping in US$107 million, a near two-fold year-on-year increase, according to the National Statistics Office.

The import figure represents a rise of 76.5 percent in quantity and 95.3 percent in value compared to January 2010.

However, it still fell short of the previous month by 1,000 units or $8 million.

Experts attributed the increase to high demand before Tet plus an automobile import tax cut taking affect this year.

However, the General Department of Customs has announced new car tax rates, effective from January 29, that will see an increase of between 1 and 6 per cent.

The minimum tariff to be applied by customs will generally increase from US$500 to $1,500 against last year. Some automobiles, such as the five-seater Toyota Corolla, will be subject to a new tariff of $11,000 instead of the current $9,500.

Most experts and traders are still optimistic about the market recovery in 2011 after the sharp dip in 2010.

Vietnam News quoted director of Truong Hai Automobile Joint Stock Company Tran Ba Duong as saying his company planned to sell 32,000 automobile in 2011. Last year, it sold 26,500 units.

A representative from Audi Viet Nam said demand in Viet Nam was increasing, shown by the number of orders his company had recently received.

In January, they had received three times as many orders compared with the same period last year, he said.

Last year, the automobile market suffered a dip due to the global recession.

According to the Viet Nam Automobile Manufacturers' Association, only 150,000 cars were sold in 2010, a year-on-year drop of 17 per cent.

The situation could look dark for automobile sellers as the Ministry of Finance has recently proposed raising registration tax from 15 to 20 per cent this year.

If this was ratified, the market would fall to the same situation as 2010, a car dealer told Vietnam News.