Tax increases auto prices

Customers look at cars in a showroom in Ha Noi. Customers are rushing to buy cars to avoid paying more for new imports due to tax rises. — VNA/VNS Photo Thanh Phan

Automobile prices have gone up after Viet Nam Customs announced a new import tax rate, in which taxes on an imported car will go up by between 3 and 20 per cent.

Autos imported from Taiwan and South Korea saw the highest price rise, with cars imported from Taiwan, such as the Toyota Camry 2.0, Toyota Altis 2.0 and Mazda 3, increasing by between $1,500 and $2,000 per unit.

South Korean imports such as the Santa Fe Model 2019 increased by $1,500 per unit while prices for Lacetti and Getz 1.1 were up $1,000 each.

Although prices had increased by around 5 per cent, car traders were still complaining that it was not enough, due to taxes being increased by up to 20 per cent.

With the new tax rate, the price of imported cars should increase by about $3,700 per unit, said Nguyen Thi Vinh, Director of Vinh Hoang Company Ltd in the northern city of Hai Phong.

However, traders have accepted these losses, as they want to avoid a negative impact on the domestic market while continuing to attract customers.

Moreover, many previously imported cars were still in storage.

These cars were imported at the old rate so they were still cheaper.

Nevertheless, experts have predicted that prices would increase sharply in the near future as these models sold out.

Recently, many companies have temporarily stopped importing cars from Taiwan and South Korea to avoid such losses.

These new taxes would be added on to the price of the cars, said an auto trader in HCM City.

The new tax rate was also strongly affecting the domestic auto market. It had raised the price of many autos including domestically-made cars and older cars.

The price of an old model car increased slightly by around $300 per unit and up, according to a seller at an auto showroom on Nguyen Trai Street in Ha Noi.

The Viet Nam Automobile Manufacturers Association announced that about 11,762 autos were sold on the domestic market in October, an increase of 103 per cent over the same month last year.

Famous car manufacturers including Toyota and Honda have continued to see high growth rates in sales for October.

Last month, Mercedes Benz sold 334 units, an increase of 80 per cent over the same month last year. Meanwhile, Honda achieved sales growth of 51 per cent with 431 units sold in October.

With more than 3,000 units handed over to customers, Toyota set a record with a growth rate of 77 per cent.

However, the highest growth rate belonged to GM Daewoo, with 276 per cent over October last year.

Last month, the company sold more than 1,600 cars.