The Vietnamese Ministry of Finance (MoF) has exposed its displeasure with the car pricing movement after the ax on the four-wheeler is reduced.
A MoF official said several car distributors only made a tiny rebate after the import tariff is reduced from 80 per cent to 70 per cent.
Recently, Euro Auto and Hyundai Motor Vietnam, respective distributors of BMW and Hyundai sedans, announced to reduce by only US$2,000-3,000 for models with retail price exceeding US$70,000.
Truong Hai Auto, the distributor of low-cost Kia sedans, decreased the price of Picanto sedan by only US$1,000, around 5 per cent rebate.
However, local carmakers show no intention of driving down their car prices.
A carmaker said the price of locally made cars is only down after the import tax on auto components and the luxury tax fall, citing they are relying on foreign parts to assemble cars.
“Lower tax and lower production costs would help automobile manufacturers reduce selling prices; then the market would cool down,” a representative of an automobile joint venture said at a recent ‘full of tension’ meeting between carmakers and policymakers.
He said at a function seeking measures to lower car price that they had been facing a lot of difficulties due to increased inputs such as materials, electricity, petrol, and water prices.
The Vietnam Automobile Manufacturers Association (VAMA) stated that the tax reduction on imported cars would affect the price of imports and it brought no support to local production.
Currently, according to statistics, the automotive industry contributes 20 per cent of State budgetary collection (if oil tax is exclusive). Thus, the car price will fall if the ministry accepts lower contributions of car industry to the coffers.
A MoF official stressed the government is doing its utmost to curb price increases and fulfill economic goals, and automobile joint ventures should share the task with the government.
“If carmakers insist on keeping selling prices unchanged, we will apply forceful measures to cool the market. These may be tax policies,” an official from MoF said.
According to carmakers, the supply of automobiles is very short in the country and buyers have to wait for months to see their car deliveries.
The VAMA figure showed its 16 member companies saw an on-year sales increase of 82 per cent to 34,998 units.
VAMA members are also dominating the automotive industry in Vietnam.
Meanwhile, car distributors imported 10,000 units valued at US$193 million in the first seven months this year, up 34 per cent and 55 per cent on year. (Investment)
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