Thursday, June 29 2017

VietNamNews

2016 car import value hits $2.3b

Update: January, 06/2017 - 09:00
A Toyota showroom in Nha Trang. The number of imported cars for 2016 to Việt Nam did not exceed that of 2015, though still clocking in at a respectable number. — Photo toyotanhatrang.com.vn
Viet Nam News

HÀ NỘI — According to the General Statistics Office (GSO), import turnover for cars in December 2016 increased in both quantity and value, with the year’s total annual car imports reaching $2.3 billion.

In particular, an estimated 16,000 vehicles were imported in December, 4,000 higher than the previous month, with import value jumping from US$190 million in November to $227 million in December.

115,000 vehicles were imported in 2016, thanks in part to the surge in December.

This high import turnover for 2016, though down by 8.5 per cent in number and down by 22.1 per cent in value compared to that of 2015, was still encouraging for the imported car market.

There were several reasons for the decrease in turnover for imported vehicles, the biggest being Việt Nam’s import tax policy.

Since the beginning of 2016, imported cars had been subject to the new Special Consumption Tax, calculated based on the bulk import price of the importer instead of the previously used method of adding import tax to the cost insurance and freight price. This change increased the price of imported vehicles by about three per cent in total.

The government should find a much-needed solution to calculate a fair import tax, said Trần Tấn Trung, director of Lien A International, Audi’s distributor in Việt Nam.

Trung said that importers should provide governmental agencies with the needed vehicle data so as to easily identify the price and appropriate tax levels, as indicated by manufacturers.

This proposal is backed by authoritative agencies, according to Nguyễn Quang Sơn of the General Department of Customs’ Department of Customs Supervision and Management. He added that the Department had applied the method and demanded vehicle companies to update the data regularly, even monthly, to facilitate the tax database.

The change in taxation mainly affected imported vehicles, generally with larger engines and higher fuel consumption than vehicles assembled in Việt Nam.

From July 1, 2016, the Special Consumption Tax began to apply to vehicles with engine cylinder capacity of three litres and up, and the added tax value on such cars was pushed to 150 per cent from 60 per cent.

Those that could benefit from this tax included imported cars from Thailand and Indonesia.  These vehicles make up the mid-end market with smaller engines.

According to the Ministry of Finance, imported cars from Thailand and Indonesia accounted for two thirds of the total number of imported vehicles in 2016.

Anticipation for the car market in 2017 indicated a significant rise in demand for whole imported cars both new and used. The demand for new cars will increase faster with many brands switching from assembling in Việt Nam to importing whole vehicles in 2017 such as Toyota, Honda, Ford or Mitsubishi, in addition to the market demand for semi-trailer trucks imported from Thailand.

However, import of cars in 2017 might very likely encounter obstacles as procedures on imports, clearance and tariffs will be tightened.

Additionally, Việt Nam spent $1.4 billion last year on car accessories and spare parts.  — VNS

 

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