EuroCham proposes cutting registration fees for all cars sold in Vietnam

03-Jul-2020 Intellasia | The Saigon Times | 6:02 AM Print This Post

The European Chamber of Commerce (EuroCham) in Vietnam has proposed that the Vietnamese government halve registration fees for imported cars, similar to the case of locally produced or assembled cars, to ensure fairness.

Prime minister Nguyen Xuan Phuc signed Decree 70 allowing a 50 percent cut in registration fees for customers who buy locally produced or assembled cars, effective June 28. The cut was among the solutions presented by the Ministry of Industry and Trade to stimulate post-Covid-19 domestic consumption.

The registration fees for passenger cars or cars with less than nine seats in Vietnam range from 10 percent to 12 percent of the car price. Under Decree 70, the registration fees for locally produced or assembled cars have been reduced to 5-6 percent of the car price. Buyers of imported cars still have to pay 10-12 percent of the car price.

In its White Book 2020, which was launched on June 30, EuroCham Vietnam noted that among the 19 European auto brands in Vietnam, only Mercedes and Peugeot enjoy a 50 percent reduction in registration fees for some of their models assembled in the country.

“We propose eliminating the discrimination in car registration fees. Imported cars should be given the same 50 percent reduction in registration fees as locally produced and assembled cars,” a EuroCham representative noted at the White Book launch ceremony.

According to EuroCham, stimulating consumption in the auto market is necessary, but a temporary remedy supporting national preference is not relevant at a time when Covid-19 is clearly a global issue.

“Such discrimination in favour of locally assembled cars does not cast the intended positive light for Vietnam with the European Union when the EU-Vietnam Free Trade Agreement is expected to enter into force soon,” EuroCham stated. It also proposed cutting 50 percent of value-added tax for both imported and locally produced cars.

European, American and Vietnamese carmakers had to suspend production, distribution and retail sales in April following the Vietnamese government’s regulations on Covid-19 infection prevention and control.

Although social distancing measures have been relaxed since May, car sales in 2020 are still expected to be slow. Data of the Vietnam Automobile Manufacturers Association showed that car sales during the first four months of 2020 hit a five-year-low as there were only 61,000 cars sold in the country, falling by 36 percent compared with the same period last year. In late April, Fitch Rating forecast that Vietnam’s car sales this year would drop by 21.8 percent against 2019.


Category: Economy, Vietnam

Print This Post