Automobile Market Poised to Thrive With Government Backing for 50% Vehicle Registration Fee Reduction

VAMA, the Vietnam Automobile Manufacturers Association, hopes that the 50% reduction in registration fees, combined with increased demand for vehicle purchases during the year-end, will boost the automobile market in the final month of the policy’s application.

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

Many experts believe that the 50% reduction in registration fees for domestically assembled and manufactured vehicles will benefit the market by stimulating consumer purchases. This policy is expected to ease 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 somewhat boosted purchasing power, it has not yet reached the intended level of consumption and sales volume. Despite the 50% reduction in registration fees, the sales volume has continued to sharply decline, reflecting an ongoing economic downturn and unpredictable developments in the global economic, political, and social landscape that pose difficulties for both businesses and consumers. As a result, car manufacturers’ inventory levels will affect cash flow, containment costs, increased interest rates, and directly impact the production and operations of many production and assembly companies.

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 preceding 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, as well as unpredictable developments in the global economic, political, and social landscape over time, which pose 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 further boost the market during the remaining period of Decree No. 41/2023/ND-CP, VAMA members have stated that they will continue to intensify and implement programs to stimulate consumer demand. These programs include an additional 50% reduction in remaining registration fees, attractive discounts, even deep discounts, lucky draws, interest rate support, free insurance, and complimentary accessories.

For example, Ford Vietnam has seen a positive impact on increasing their sales volume through a 100% reduction in registration fees on November 11. Mitsubishi Motors Vietnam and its authorized distribution network 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 along with the government’s 50% reduction for customers purchasing Honda City, BR-V, HR-V, Civic, Accord, and many other incentives.

Isuzu is offering an additional 50% reduction in registration fees for the Isuzu D-MAX and mu-X models. Hino Motors Vietnam is also providing an additional 50% reduction in registration fees for Hino XZU, FL, and FM vehicles. Toyota Vietnam and its dealerships are offering customers 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 not only applies 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 implements the “Gratitude to Loyal Customers” program and offers a home charging Wallbox as a gift to customers purchasing EQ vehicles,…

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

TH (Tuoitrethudo)