Discover the previous post: Vietnam Automotive 2019 Outlook (Part 1) .
2019 is expected to be a competitive year of the Vietnamese automobile market, which is going to be fraught with fabulous newbies and various tax policies.
2. Tax policies
Vietnamese automotive market in 2019 is foretold to be unstable due to various related bills is being considered, such as increasing registration fee, property tax, etc.
In terms of registration fee, the Ministry of Finance suggested increasing registration fee of semi-truck under 1.5 tons and under 5 seats. If this bill is officially implemented, Vietnamese consumers will pay three or four times higher for first-time registration tax than that of now.
Besides the increasing of registration fee, Ministry of Finance also suggested raising excise tax, especially for semi-trucks, to 30 – 45% (previously from 15 – 25%).
In addition, Ministry of Finance is consulting ministries, departments, local governments about applying property tax (0,3% or 0,4%) on plane, car and yacht of which cost is above 1.5 billion dong.
On October 17th, Europe Commission approved EVFTA (EU-Vietnam Free Trade Agreement) which will absolutely change the price of automobiles imported from Europe to Vietnam and vice versa. In details, with EVFTA, import tax from Europe will gradually reduce to 0% within 7 years for cars and 10 years for light trucks, calculated from the validation date.
On March 9th, 2018, 11 members of The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, comprising Vietnam) officially signed this agreement. Although the import tax is going to become 0%, not everybody is so hopeful to the future of purchasing a car with cheap price. It is due to what happened when zero import tax from ASEAN is applied on January 1th, 2018, but not long after that, Decree 116 is implemented.
3. Is it going to be a year of importing CBU?
Zero tax will certainly encourage imported volumes to rapidly grow, especially in automotive industry. Decree 116 of 2018 created a trade barrier when it is implemented, but now, automotive manufactures got through it all and let’s see how many CBU vehicles imported within the first 15 days of 2019. It was a massive number which is 6,362 vehicles valued at 158 million USD, including 4,264 cars and 1,820 trucks (semi-trucks), which doubled the half – monthly average vehicle imported last year.
Year of the Pig has come and promised to bring a brighter prospect for automotive industry in Vietnam. And DealersEDGE is here to help your dealership and your sales team achieve your goals faster in the new year. Let’s go further and fly higher with our solutions!