Vietnam's Jan car sales fall 36 pct y/y on taxes
HANOI - Vehicles sales by 11 foreign-backed automakers in Vietnam dropped 36 percent in January compared to same month last year to 1,517, the Vietnam Automobile Manufacturers Association said on Thursday.
The sector has seen a decline in sales since January 2005, when higher consumption taxes were imposed on domestically assembled vehicles.
The government's decision to cut tariffs on imported vehicles from Jan. 1 2006 to 90 percent from 100 percent also prompted potential buyers to delay purchases.
Consumption taxes on imported vehicles were also cut, from 80 percent to 50 percent, similar to the rate applied to domestically assembled vehicles.
Toyota continued to dominate the market, selling 811 cars for a 55 percent share. Sales rose 14.1 percent from last January due principally to aggressive rebates and new models, including crossover vehicle Innova.
Most other automakers, including Ford , GM Daewoo and Mitsubishi , faced sharp sale declines of between 11.9 percent to 95.3 percent compared to last January.
Vietnam's annual per capital income remains one of the world's lowest at around $500, but its car prices are among the highest due to high tariffs and taxes. A Toyota Camry sedan sells for $65,000 compared to around $20,000 in Japan.
Customers in the communist country paid around $280 million to import cars last year, down 13.2 percent from 2004, government statistics showed.
Dealers said they expected car imports would rise significantly this year because the government now allowed the imports of used cars.
Reuters - February 9, 2006.
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