Auto industry receives needed policy stimulus
Auto industry receives needed policy stimulus
Auto producers are trying to put last year’s disappointment behind them and are hoping for a prosperous 2013.
2012 was a challenging year for Viet Nam’s automobile industry. The market dropped by more than one-third with just 93,000 units sold.
Most of last year’s decline can be attributed to increases in existing fees and taxes and proposed new levies.
However, since the start of this year, the Government has cancelled plans for personal vehicle fees, and reduced registration fees to 10 per cent for new under-ten-seat cars and to 2 per cent for secondhand vehicles. This seems to have stirred the market.
Industry insiders agreed that the Government’s lowered lending rates and huge capital injection into the economy would also be decisive for the auto market’s recovery.
Mercedes-Benz Viet Nam CEO Michael Behrens told Viet Nam Economic Times the demand for luxury cars in the local market still had great potential. More and more successful young Vietnamese people were opting for safe and luxury cars.
Laurent Charpentier, chairman of the Viet Nam Automobile Manufacturers Association (VAMA) and General Director of Ford Viet Nam, forecast that 2013 would be a difficult year with many challenges for the economy in general and the auto industry in particular.
The slow recovery of the economy plus fees and tax barriers targeting car users would demand greater efforts from manufacturers to prevent sales from falling further.
However, he also noted positive signals in the regional auto market. The demand for automobiles in Viet Nam was still very high compared to other countries in the area, due to rising salaries.
Charpentier believed that this year’s sales volume would reach 100,000 units, a year-on-year rise of 8 per cent.
By 2018, the auto import tax among ASEAN countries will fall to 0 per cent, in line with the ASEAN Free Trade Area (AFTA) policy.
The tax break is imminent, but frequent changes to tax and fee policies by the Government and authorities are discouraging buyers.
According General Director of Audi Viet Nam Laurent Genet, Viet Nam needed to convey support for the manufacturers if the country wanted to develop the car industry.
Toyota Motor Viet Nam’s general director Yoshihisa Maruta said that the biggest problem now lay in the policies. The most important thing to help the industry grow was a stable, clear and consistent management policy.
The Ministry of Industry and Trade (MOIT) had been making efforts to develop the automobile industry, focusing on boosting domestic demand, according to Deputy Minister Tran Tuan Anh.
A stable and transparent roadmap to lower taxes for the post-2018 period when imports from ASEAN would be tax-exempt would be considered carefully to help auto firms formulate production plans.
Signs indicate that the Vietnamese auto market is on the road to recovery
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