Tax cuts boost small-car sales VNTimes

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Car manufacturers in Vietnam are rolling out small cars at reasonable prices in an effort to speed up the market.

Thetrend follows a draft plan to develop the Vietnam automobileindustry by 2020 with a vision to 2030 by cutting consumption tax andownership registration fees by 50 percent for vehicles with cylindercapacity of less than two litres.

According to the VietnamEconomic Forum, automobile markers have said if the draft plan isapproved long-term, they will strongly invest in manufacturing.

GeneralMotors Vietnam is one of the manufacturers who stand to benefit. Itrecently introduced the new, automatic, one-litre Chevrolet Spark for 377million VND (18,000 USD). Hyundai Thanh Cong is offering Elantra modelsfrom 699 million VND to 756 million VND (33,300 to 36,000 USD).

HondaVietnam in HCM City has displayed its City model, but has yet toannounce the price. In July, Vinaxuki will offer small size VG modelstargeting customers in urban areas. They will sell from 220 million VNDto 350 million VND.

Director of Hyundai Thanh Cong Le Ngoc Ducsaid policies for the industry were so changeable that his company didnot dare to maintain investment in manufacture.

Duc said if theGovernment’s coming policies were preferential and stable for domesticmanufacture, his company would boost assembling in Vietnam andattract and encourage foreign part producers to join in the country’sindustry.

Director of General Motors Vietnam Gaurav Gupta saidthe recent cut in ownership registration fee from 20 percent to 10-15percent of a car’s value had improved the market further and raisedmarkers’ turnover.

“We are waiting for a renovation in Vietnam’s automobile industry policies. If the Government show preference fordomestic manufacture, we will surely push up investment to increase thelocal-made rate, as well roll out various new models with reasonableprices,” he said.

According to Director of Vinaxuki Bui NgocHuyen, if the special consumption tax rate and ownership registrationfee were cut for small cars, buyers would saw from 5,000 USD to 7,000USD for each unit they purchase.

“This would bring prices down.It’s really good news, not only for those who dream of possessing cars,but also to automobile makers, who hope to boost sales,” said Huyen. “Wewish the new policies are issued as soon as possible.”-VNA

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