Auto Prices May Not Drop Further with Registration Fee Incentives from June Onwards

Car prices have been significantly discounted to attract customers. Photo by Phuong Lam.

Recently, the Ministry of Finance has requested an urgent study and proposal for an extension of the tax payment deadline and a reduction in registration fees for domestically-produced and assembled cars. This information has caught the attention of many interested customers, who are now waiting for the opportunity to buy cars at even lower prices.

However, in reality, the upcoming registration fee reduction is unlikely to significantly impact the market’s best-selling car models.

Attractive Car Prices

Since the beginning of this year, even before the proposed registration fee reduction, Vietnam’s automobile market has received a series of adjustments to stimulate consumer demand. Popular car models have been offered with discounts ranging from tens to hundreds of millions of dong by manufacturers to boost consumption.

For instance, Mitsubishi is offering a 50% registration fee support for the Triton, Attrage, and Pajero Sport models, along with additional gifts such as physical insurance, a rearview camera, a panoramic camera, fuel vouchers, or a shark fin antenna, depending on the model and version.

Honda Vietnam is also offering a 100% registration fee promotion for customers purchasing the 2023 CR-V with a VIN number in May, along with an additional year of body insurance.

Honda CR-V e:HEVs. Photo by Vinh Phuc.

Other Honda models, such as the City, HR-V, and Civic, are also being offered with a 50-100% reduction in registration fees. Notably, the Honda Accord continues to receive a direct cash discount of VND 220 million for customers who complete their payment procedures before May 31.

In May, Nissan Vietnam is offering a 100% registration fee support for its entire range of vehicles, including the Almera, Navara, and Nissan Kicks. This promotion is equivalent to a cash benefit of VND 50-95 million, depending on the registration location.

Suzuki is also providing registration fee support for its entire passenger car line-up in Vietnam. The highest benefit is offered for the Suzuki Ertiga Hybrid, with a total value of VND 89 million, including a 100% registration fee and a preferential interest rate package.

During the same month, the Suzuki Ciaz, Swift, and XL7 are being promoted with a 50% registration fee reduction, equivalent to a value of VND 30-45 million.

Unlikely to Drop Further

Looking back at the most recent registration fee reduction in 2023, before the program took effect, manufacturers also launched long-term promotions offering 50-100% of the fee, worth tens to hundreds of millions of dong.

Immediately after July 1, 2023, when domestically-assembled cars began to enjoy the registration fee preference under Decree 41, manufacturers and dealers adjusted their promotional values. Dealers and manufacturers quickly lowered the promotional amount or combined both programs.

For example, some Ford dealers at that time reduced their promotions from VND 50-60 million per car to VND 30-40 million.

Car prices after the registration fee promotion are unlikely to drop further. Photo by Phuong Lam.

Speaking to Tri Thuc – Znews, a car dealer employee predicted that car prices after the registration fee reduction would be unlikely to drop significantly as dealers and manufacturers would adjust their promotions to match market demand. This has happened before and is sure to recur this year.

“Compared to the previous period, the total value of promotions that customers receive remains the same,” the person added. “The only difference is in the 50-100% registration fee, which was previously paid by the dealer and is now supported by the government.”

“Compared to the period before the registration fee incentive, the total value of promotions that customers receive remains the same.”

Car dealer employee in Ho Chi Minh City

In reality, instead of receiving a double incentive equivalent to 150-200% of the registration fee, customers will only benefit from cash discounts offered by dealers and manufacturers, ranging from a few million to a few tens of millions of dong.

“Assuming the current incentive is VND 100 million, when there is a registration fee reduction policy, the dealer’s promotion may be adjusted downwards, resulting in little change in the on-road price,” shared a customer in Ho Chi Minh City.

Overall, the registration fee promotion is still expected to boost the entire Vietnamese automobile market’s sales performance and help it regain growth momentum after a significant decline. Manufacturers and dealers will have less burden in offering price reductions and will have additional resources to sustain them during challenging times.

With a series of promotions and programs already implemented by manufacturers and dealers, whether there is a registration fee incentive or not, now is an excellent opportunity for customers to acquire their desired car models at reasonable prices.