Expectations for the Automobile Market to Flourish in the Near Future as Government Offers 50% Vehicle Registration Fee Support

The Vietnam Automobile Manufacturers Association (VAMA) hopes that with the benefits brought by the 50% reduction in registration fees, along with the increased demand for vehicle purchase and consumption during the year-end, the automobile market will flourish in the last month of the policy’s application.

Prior to this, on June 28, 2023, the government issued Decree No. 41/2023/ND-CP, which stipulates the registration fees for vehicles, trailers or semi-trailers towed by vehicles, and similar vehicles that are domestically produced or assembled. According to the decree, from July 1, 2023, to December 31, 2023, the registration fees will be 50% of the rates specified in Decree No. 10/2022/ND-CP dated January 15, 2022.

Many experts believe that the 50% reduction in registration fees for locally assembled and domestically manufactured cars will bring many benefits to the market, stimulating consumer buying. This policy is expected to help alleviate difficulties faced by domestic automobile production and assembly businesses due to the negative impact of the economic recession during the recovery phase after the pandemic, thereby contributing to increased state budget revenue.

Although the policy has had a certain impact on boosting purchasing power, it has not yet achieved the expected level of consumption and sales volume. Despite the 50% reduction in registration fees, the sales volume has continued to decline sharply, reflecting an ongoing economic downturn and the unpredictable developments in the global economic, political, and social landscape which have caused difficulties for both businesses and consumers. Consequently, the inventory of car manufacturers will affect cash flow, containment costs, increased interest rates, as well as directly impacting production and operations of many production and assembly companies.

Specifically, during the four months of implementing the 50% reduction in registration fees (from July to the end of October 2023), the sales volume of the Vietnam Automobile Manufacturers Association (VAMA) decreased by 31% compared to the previous four months (four months without the preferential policy) and decreased by 16% compared to the same period last year (from July to October 2022).

Despite the continued sharp decline in sales volume, even during the implementation of the 50% reduction in registration fees, it indicates an ongoing economic downturn after the pandemic, in addition to the unpredictable developments in the global economic, political, and social landscape over time, which have caused difficulties for both businesses and consumers alike.

Starting from January 1, 2024, the registration fees will continue to be implemented in accordance with the regulations of Decree No. 10/2022/ND-CP dated January 15, 2022, without the 50% reduction.

To create further momentum for the market during the remaining period of Decree No. 41/2023/ND-CP, the members of VAMA have stated that they will continue to intensify and implement programs to stimulate consumer demand. These programs include additional 50% reduction in remaining registration fees for customers, attractive discounts, even deep discounts, lucky draws, interest rate support, free insurance, and complimentary accessories.

For example, Ford Vietnam’s 100% reduction in registration fees on November 11 has had a positive impact on increasing the company’s sales volume. Mitsubishi Motors Vietnam and its authorized distribution system nationwide are offering a 100% reduction in registration fees for many models in November 2023. Honda Vietnam and its car distributors continue to offer an additional 50% reduction in remaining fees alongside the 50% reduction in registration fees provided by the government for customers purchasing Honda City, BR-V, HR-V, Civic, Accord, and many other gifts.

Isuzu is offering an additional 50% reduction in registration fees for the Isuzu D-MAX and mu-X models. Hino Motors Vietnam is also offering an additional 50% reduction in registration fees for Hino XZU, FL, and FM vehicles. Toyota Vietnam and its dealerships are providing customers with the golden opportunity to own a car with support for up to 100% reduction in registration fees (including the government’s portion).

Similarly, Mercedes-Benz is not only applying a 50% reduction in registration fees to the new-generation C-Class, E-Class, GLC X254, and Mercedes-AMG C43 4Matic performance model, but also implementing the “Gratitude to Loyal Customers” program and offering a home charging Wallbox as a gift to customers purchasing EQ vehicles,…

Therefore, if customers decide to make a purchase during this period of the year, they will be able to enjoy double benefits, multiple levels of incentives, even unprecedented incentive packages from automobile manufacturers, assemblers, and dealers. Alongside the declining interest rates offered by banks, the high year-end demand, attractive promotions, and the ongoing preferential period for registration fees, November and December 2023 will be the right time for many customers with purchase plans to make their move.

TH (Tuoitrethudo)