Vietnam’s 2017 automobile market below expectation
The Vietnam Automobile Manufacturers’ Association (VAMA) announced on January 10 that it sold 27,882 automobile units in December 2017, up 13% from the previous month.
Of the figure, 14,621 were passenger cars, up 14%; 11,889 were commercial vehicles, up 13% while 1,372 were special-use vehicles, down 6% month-on-month.
Also in December 2017, up to 20,047 units were assembled at home, a month-on-month increase of 13% and 7,835 others were imported, marking a 11% rise.
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As of late December, the sales of domestically-assembled units fell by 19% to 194,960 while imported ones increased 9% to 77,790.
The falling sales were attributed to consumers’ wait for decrease in automobile prices in early 2018 when automobile import tariff will slip to 0% in accordance with the ASEAN Trade in Goods Agreement.
In order to stimulate demand, almost all domestic assemblers and distributors offered a series of promotions and discounts. However, consumers still showed little interest.
However, in mid October, the government issued Decree No.116/2017 ND-CP on tightening automobile manufacturing and trade.
Later in November 16, 2017, it issued Decree No.125/2017/ND-CP on amendments and supplements to some articles of Decree No.122/2016/ND-CP on import tariff and preferential import tariff, list of goods and their flat tax, compound tariff and out-of-quota import tariff.
Accordingly, flat and compound tariffs on imported secondhand automobiles will increase by thousands of US dollar from January 1, 2018.
According to industry insiders, the market could see decrease in prices of domestically-assembled automobiles this year thanks to 0% import tariff on automobile spare parts and 5% reduction in special consumption tax on units with engine 2.0 and less.
Thaco, Huyndai Thanh Cong and Toyota Vietnam are offering discounts on such kind of vehicles but their prices will not be cheaper than promotion periods in 2017.
