An auto production line at Thanh Cong Huyndai Auto Plant in Ninh Binh Province's Gian Khau Zone.(Photo: VNA)
Hanoi (VNA) – Vietnam’s car import turnover in December 2016increased in both quantity and value, making the year’s total annual carimports finish at 2.3 billion USD, according to the General Statistics Office(GSO).
In particular, an estimated 16,000 vehicles were imported in December, 4,000higher than the previous month, with the imported value jumping from 190million USD in November to 227 million USD in December.
115,000 vehicles were imported in 2016, thanks in part to the hike in December.
This high import turnover for 2016, though down by 8.5 percent in number and 22.1percent in value compared to that of 2015, was still encouraging for theimported car market.
There were several reasons for the decrease in turnover for imported vehicles,the biggest being Vietnam’s import tax policy.
Since the beginning of 2016, imported cars had been subjected to the newSpecial Consumption Tax, calculated based on the bulk import price of theimporter instead of the previously used method of adding import tax to the costinsurance and freight price. This change increased the price of importedvehicles by about three percent in total.
The government should find a much-needed solution to calculate a fair importtax, said Tran Tan Trung, director of Lien A International, Audi’s distributorin Vietnam.
Trung said that importers should provide governmental agencies with the neededvehicle data as to easily identify the price and the appropriate tax levels, asindicated by manufacturers.
This proposal is backed authoritative agencies, according to Nguyen Quang Sonof the General Department of Customs’ Department of Customs Supervision andManagement. He added that the department had applied the method and demandedvehicle companies to update the date regularly, even monthly, to facilitate thetax database.
The change in taxation mainly affected imported vehicles, as these had beenvehicles with larges engines and higher fuel consumption than vehiclesassembled in Vietnam.
From July 1, 2016, the Special Consumption Tax began to apply to vehicles withengine cylinder capacity of three litres and more, and the added tax value onsuch cars was pushed to 150 percent from 60 percent.
Those that could benefit from this tax included imported cars from Thailand andIndonesia. These vehicles make up the mid-end market with smaller engines.
According to the Ministry of Finance, imported cars from Thailand and Indonesiaaccounted for two third of total number of imported vehicles in 2016.
Anticipation for the car market in 2017 indicated a significant rise in demandfor whole imported cars, both new and used. The demand for new cars willincrease faster with many brands switching from assembling in Vietnam toimporting whole vehicles in 2017 such as Toyota, Honda, Ford or Mitsubishi, inaddition to the market demand for semi-trailer trucks imported from Thailand.
However, import of cars in 2017 might very likely encounter obstacles asprocedures on imports, clearance and tariffs will be tightened.
Additionally, Vietnam spent 1.4 billion USD last year on car accessories andspare parts./.
VNA
