A drastic auto sales decline has led the Vietnam Automobile Manufacturers Association (VAMA) to request HCM City and Hanoi authorities to slash car registration fees to 10 percent from the respective 15 percent and 20 percent to prop up lackluster demand.
The two cities are the nation’s biggest auto markets. According to VAMA, the fact that car registration fees were hiked from 10 percent to 15 percent by HCM City and from 12 percent to 20 percent by Hanoi early this year has dashed many people’s hopes of owning a car.
Moreover, with several new fees expected to be introduced soon, such as a personal car ownership restriction fee, the auto market has almost come a standstill. Many consumers deem the annual fee of VND10-20 million as too high.
As a result, the automobile market has seen a sharp drop in sales. Over the first five months, the number of vehicles sold plunged by 40 percent over the same period last year.
Therefore, in a bid to revive the auto industry, VAMA has proposed the people’s councils and committees of the two cities reduce the car registration fees to at least 10 percent.
VAMA said the auto sales slump had affected budget revenues of the provinces and cities where automakers and assemblers operate because VAMA members have to revise down their production plans in response to the poor sales. In addition, members of VAMA have laid off a large number of employees to cope with the tough situation.
Earlier, to rescue the market, VAMA petitioned the government to disapprove of the proposed personal car ownership restriction fee, and at the same time, lower car registration fees to reasonable rates. In particular, the industry association suggested a 5 percent fee rate applicable nationwide, similar to the registration fee of 2 percent applied for all trucks.
VAMA said it is willing to meet with the people’s councils and committees of HCM City and Hanoi over measures to improve the traffic situation in these cities and develop the auto industry in accordance with the development plan for the Vietnam automotive industry until 2020, with a vision to 2030 compiled by the Ministry of Industry and Trade.