Vietnamese people queuing to beat tax increase on some cars
Analysts say that Vietnam’s automobile market is booming as buyers rush to take advantage of reduced tax on car models with five or less seats and engine displacement of two liters or less. The effect of a five percent reduction in the luxury tax, to 45 percent, and temporary reductions in the cost of registration and VAT on these vehicles is to reduce their total price by ten percent.
Cars running out . . .
A lot of sales agents queried by Tuoi Tre Daily in HCM City City say they now do not have smaller cars in stock.
A Toyota dealer said that if clients register now to buy a Vios, they will only get delivery of the medium sized sedan in October. He added that the supply of larger vehicles is also running short, even though taxes on vans and SUVs were increased in May. Buyers of Toyota Fortuners must wait till November or December for delivery. Another Toyota sales agent said that four or five orders are placed daily for the Innova van.
At Saigon Ford, a manager said that there have been no 2.3L Escapes in stock since June 2009. The showroom is empty. As soon as this dealer receives his 25-30 cars a month, they are delivered to the waiting buyers.
The used car market has become hot too. A used car dealer on Cao Thang Street (District 3) said he’s seen a sharply increased number of clients seeking to buy used cars in the last month. He added that he must ‘scour the market’ to find used cars to sell.
Hung from Binh Thanh District said that he advertised his black 2007 Innova at 440 million dong and found a buyer in just one week.
. . . but manufacturers cannot raise capacity
The Vietnam Automobile Manufacturers’ Association (VAMA) confirms that small sedans are selling very well. 9699 cars were sold in June 2009, 1,000 more than in May and slightly above the June 2008 level. Toyota Vietnam in June delivered 404 Vios sedans and 495 of the Corolla Altis, well above than its planned 150 cars a month. Toyota has an order backlog of 6000 cars.
Honda Vietnam earlier this year expected to sell 3,000 Civics and CR-Vs. It had sold 1,800 already by the end of June.
VAMA’s forecast of 100,000 to 110,000 sales in the Vietnamese automobile market in 2009 is proving to be quite low. Analysts believe that sales could reach 140,000 cars this year thanks to high demand. However, say the analysts, it is impossible for manufacturers to ramp up production further. In late 2008, when demand was low, automobile manufacturers and parts producers cut back capacity. Though the car market has heated up unexpectedly in the last few months, they cannot adjust immediately to churn out more cars to deliver to customers.
