Vietnam's auto market forecast to see another good year

Thanh Nien News

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An automobile factory in the central province of Quang Nam. Photo: Dinh Muoi An automobile factory in the central province of Quang Nam. Photo: Dinh Muoi

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After posting a record growth of 55 percent last year, Vietnam's automobile sales will continue to grow strong this year, albeit at a lower rate, news website VnMedia reported on Tuesday, citing local businesses.
Executives of major producers and importers such as Ford Vietnam, GM Vietnam and Truong Hai Auto Corporation expected the industry's sales will grow around 30 percent, saying Vietnam's economy will continue to grow strong, boosting the local demand, according to the website.
Yoshihisa Maruta, chairman of Vietnam Automobile Manufacturers' Association, on the other hand, said its members expected a year-on-year rise of 10 percent.
Bui Kim Pha, deputy CEO of Truong Hai Auto Corporation, said in the news website that the auto market is stabilizing, so its growth will not be as high as last year when it saw a six-year high rise in sales to nearly 245,000 units.
A boom in auto imports from ASEAN as an impact of further tax reductions under a regional trade agreement will not happen this year, because the impact has been hampered by a hike in luxury tax, he said.
Under a new rule that took effect on January 1, luxury tax is calculated on an imported car’s retail price, unlike previously when it was calculated on their cost, insurance freight (CIF) price before the addition of duties and markups. The revision has reportedly forced auto importers to increase their prices by 2-13 percent.
Pha said the boom will likely happen in 2018 when automobiles will be imported from ASEAN tax-free.
Early this year Vietnamese government reduced duties on automobiles imported from neighboring countries to 40 percent from 50 percent last year.

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