Vietnam's car sales have remained stagnant since the beginning of the year, forcing manufacturers to rethink their strategy and dealing a blow to tax revenues generated by imports.
On August 20, Dau Tu newspaper reported that automobile revenues in the first seven months this year had fallen 39 percent comparing to the same period last year, citing the latest statistics from the Vietnam Automobile Manufacturers' Association (VAMA).
VAMA also reported that retailers sold 7,433 cars in July, a 13 percent increase comparing to June, but dropping 26 percent comparing to July last year.
In late June, VAMA's chairman, Laurent Charpentier, told local media that in addition to the tough economy and poor access to reasonable loans, "the increase in taxes and fees on cars that were implemented on January 1, 2012 have hurt the aspirations of many potential carbuyers."
According to local media, Hanoi raised the car registration fee from 12 percent to 20 percent of the vehicle's total value and the license plate fee tenfold to VND20 million (US$950).
Ho Chi Minh City has also increased its municipal registration fee from 10 percent to 15 percent .
Earlier this year, VAMA predicted Vietnamese consumers would buy the same number of cars they did in 2011, roughly 140,000 units.
However, the association now predicts sales closer to 95,000 units while remaining hopeful that revenues would increase in the second half of the fiscal year, Dau Tu quoted Laurent as saying.
Yoshihisa Maruta, chief executive of Toyota Motor Vietnam Corp., told the newspaper that his company has continually adjusted its sales strategy to mitigate the recent slowdown.
At the moment, Toyota Vietnam is competing for customers by focusing on its mid-range cars. This month, it has launched two new models with prices ranging from $42,000 to $47,000.
The company sold 12,000 cars in the first seven months of this year, a 24 percent drop compared to the same period last year, said Yoshihisa.
"In 2011, we sold around 23,000 cars. So far this year, we have planned for revenue to be 20 percent lower than it was last year. However we expect that it won't be easy to reach that target, since customers are not ready to buy cars due to the economic slowdown and the unstable tax policy," he said.
Falling automobile demand has also led to a drop in tax revenues generated from car imports.
Dau Tu reported on Monday that tax revenue in the first seven months from auto imports to Hai Phong was approximately 35 percent of the full-year target that the General Customs Department set for the northern port, which was VND47.2 trillion ($2.3 billion).
Located around 100 kilometers from Hanoi, Hai Phong Port is the major sea transport gateway for the whole northern region. Among the five national ports sanctioned to import automobiles, it is the busiest.
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