How does the 50% registration tax reduction policy affect the Vietnamese car market?

From December 1, 2021 to May 31, 2022, the registration fee for domestically manufactured and assembled cars has been preferentially reduced by 50%, according to the provisions of Decree 103/2021/ Decree-CP dated 26/11/2021. This regulation is aimed at supporting the auto industry during the recent COVID-19 pandemic.

From June 1, 2022: The registration fee rate will continue to comply with the provisions of Decree 20/2019/ND-CP amending Decree 140/2016/ND-CP on registration fees

Thus, in the past 6 months, the first registration fee for passenger cars with 9 seats or less is 10%, and with 50% discount, the registration fee will be reduced to 5 – 6%. car value. This preferential policy helps consumers save some money when checking in for wheelchairs.

Currently, most of the popular car manufacturers have factories manufacturing and assembling cars in Vietnam. In which, two Korean automakers, Kia and Hyundai, are manufacturing and assembling the most cars in Vietnam. Specifically, Kia has about 8 passenger car models that enjoy a 50% discount on registration fees. These Kia models include Kia Morning, Kia Soluto, Kia K3, Kia Sonet, Kia Seltos, Kia Rondo, Kia Sorento and Kia Carnival. These models have prices ranging from more than 300 million VND to more than 2 billion VND, of which the lowest is Kia Morning with the price from 304 to 439 million VND and the highest is Kia Carnival with the price from 1,199 billion VND to 2,399 billions dong. The amount of money saved when buying these models of Kia will be from about 20 million VND to more than 100 million VND.

In addition to the two Korean automakers, Japanese automakers also have a strategy of producing vehicles in Vietnam. Mazda has 4 models of locally assembled cars, including Mazda3, Mazda6, Mazda CX-5 and Mazda CX-8, customers who buy these models of Mazda will save about 30-75 million VND in registration fees.

The first month of officially applying the preferential policy of 50% of the registration fee for cars manufactured and assembled in the country, according to the data of the Vietnam Automobile Manufacturers Association (VAMA). of the whole market was 46,759 vehicles, up 21% compared to the previous month. In this month, sales of domestically assembled cars reached 25,686 units, up 23% from the previous month.

Although the increase was not too sudden, it is worth mentioning that during that time, when domestically assembled cars enjoyed the policy of 50% reduction in registration fees, a series of imported cars were also sold by car manufacturers and dealers. 50-100% reduction in registration fee. These developments have helped stimulate demand for the Vietnamese auto market.

Entering 2022, the first months of the year were quite gloomy due to the Lunar New Year and the epidemic situation at the beginning of the year. According to VAMA’s report, the total sales of new cars in the first 4 months of the year reached 132,865 vehicles, up 31% over the same period in 2021. In which, sales of domestically assembled cars increased by 38%, and imported cars increased by 38%. 22% compared to the same period in the first 4 months of 2021. Including sales in December 2021 and the first 4 months of 2022, nearly 180,000 cars were sold during the period of applying the preferential policy of 50% reduction in advance fees. contacts.

There is an issue that cannot be ignored during the period when Decree 103 is applied, which is developments in the car market. The most prominent in this period is the scarcity of some “hot” car models, including domestically produced and assembled models. Therefore, despite receiving incentives from the stimulus policy, many people still cannot buy or receive a car on time, and receive a 50% discount on registration fees.

Even many models are sold at a higher price than the listed price, or are forced to buy an accessory package. The Ford Ranger pickup or the Kia Seltos high-rise urban SUV are proof that the supply is scarce, and that consumers have had difficulty or disadvantage when buying these models in recent times.

Currently, many car models have not escaped the scarcity situation, some dealers have “dodged” for buyers to enjoy incentives, by asking buyers to pay enough money to buy cars, then issue invoices before the date of purchase. December 31, 2022 to enjoy incentives when checking in for wheelchairs. However, this solution is also quite risky for users, because with the current difficulties in the supply chain, customers may have to “wait for a long time” to receive the car even though they have paid in full.