Car makers want registration fees cut

An automobile showroom on Nghi Tam Street, Ha Noi. The Viet Nam Automobile Manufacturers Association has asked the Government to reduce car registration fees from the current 15-20 per cent to 5-10 per cent. — VNS Photo Truong Vi

HA NOI (VNS)— The Viet Nam Automobile Manufacturers Association (VAMA) has asked the Government to reduce new car registration fees from the current 15-20 per cent to 5-10 per cent.

In addition, the association proposed standardising the fee for providing car number plates to VND2 million (US$96) in order to help auto makers overcome their current difficulties.

It also asked the government to keep the validity of Circular 20, which blocks further car importers and dealers from joining the market in a bid to boost local production.

VAMA's recent proposal came as the Ministry of Finance moved to reduce registration fees for new cars, which is likely to come into effect on March 15.

Despite a seasonal increase of 75 per cent year-on-year in January 2013 when 7,363 cars were sold, automobile sales in Viet Nam fell by a record 37 per cent in 2012.

VAMA said the plunge could be attributed to the economic recession.

Vehicle sales for the 12 months of 2012 totalled just 93,000 units, according to the association, which represents the country's 18 car makers.

The association said the decline was worsened by a series of fees and taxes introduced which have dissuaded potential buyers from making a purchase.

The Government recently issued a resolution to help struggling businesses and stimulate the slowing economy by cushioning the blow of planned motoring fees.

The 02/NQ-CP resolution will reduce the new car registration fee to 10 per cent of its total value and 2 per cent for second hand cars across the country.

Meanwhile, it will cancel the implementation of car ownership fees which would have seen each car owner pay VND20-50 million ($957-2,392) per year, in an attempt to restrict rising car numbers which are responsible for chronic traffic congestion.

In March last year, VAMA asked the Government to postpone the implementation of a series of car fees initiated by the Ministry of Industry and Trade, saying the Government should first issue a policy to develop and diversify the transportation network.

If the proposed fees are applied, they say it will be impossible to achieve the Government's auto development plan by 2020, which is regarded as a pillar of the country's economy.

In that case, Viet Nam will have to spend approximately $12 billion per year on car imports, which will negatively affect the trade balance. — VNS