Vietnamese companies spent more than US$903 million in the first quarter to import 41,780 Completely Built Cars (CBUs), according to a report by the General Statistical Office (OGE).
The accumulated import volume of CBU cars in the first quarter increased by 76% in volume and 60.8% in value compared to the same period of the previous year.
In March, 15,000 cars worth $332 million were imported into Vietnam, representing a year-on-year increase of 48.8% in volume and 48.5% in value.
Despite the growing number of imported cars, the Vietnam Automobile Manufacturers Association (VAMA) stated that sales for the entire market in the first two months barely exceeded 17,300 units, due to low purchasing power.
Local auto experts said this was an unusual and ominous sign as pressure on auto inventories remains high.
Only in February, purchasing power increased significantly due to promotional campaigns offered by car manufacturers, with a total sale of 28,913 units.
The local car market is expected to break in 2023. An incomplete statistic shows that Vietnam’s car inventory reached 38,000 units.
Faced with gloomy market prospects, the VAMA has recently proposed that the government halve the registration tax on locally assembled or manufactured cars in the first half of the year to boost market demand.
In a letter sent to the Prime Minister, both the Vietnam Automobile Manufacturers Association (VAMA) and the Vietnam Mechanical Industry Association (VAMI) also jointly requested an extension of the deadline for paying the excise duty.
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The Vietnam Vehicle Importers Association (VIVA) has raised its voice for fair treatment after learning that the government asked the Ministry of Finance and other relevant ministries to come up with a 50% reduction in registration fees for assembled cars or locally made.
the VAMA has recently proposed that the government halve the registration tax on locally assembled or manufactured cars
VIVA said car importers are faced with high inventory so they also want to enjoy the same policy support from the government.
Vietnam experienced a sharp increase in purchasing power in the last six months of last year, marking a milestone in auto sales for the first time, with 500,000 vehicles sold. Of this figure, CBU cars accounted for more than 40%.
A representative of a car importer attributed the increase in imported cars in the first three months to the purchase contracts already signed with foreign sellers in 2022, noting that there is no reason for local car importers to buy more cars this year, as They are faced with large amounts of unsold cars due to low local purchasing power.
The import volume of CBU cars is expected to continue to decline this year. Unless the government support policy is applied to both Completely Knocked Down (CKD) vehicles and CBUs, the local car market could recover.
Article republished from the Vietnamese state media VNA in the framework of an agreement between both parties to share content. Link to the original article:https://en.vietnamplus.vn/imported-cars-flood-local-market-despite-of-poor-purchasing-power/250844.vnp
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