Car demand up following news of registration fee cut

By Doan Dung, Thanh Nhan   November 30, 2021 | 07:11 pm PT
Car demand up following news of registration fee cut
Cars are seen at a dealer in Hanoi. Photo by VnExpress/Pham Trung
Car dealers have seen the number of customers triple after a 50 percent registration fee discount for locally assembled cars was announced last week.

Toyota, Honda, Hyundai, Kia and Mazda dealers in Cau Giay District reported 30 and even 50 customers a day last weekend, compared to the average 10-15 .

The number of signed contracts rose from the average 10 a day to 30.

A Peugeot dealer locked in seven deals on the weekend even though it was often deserted.

Customers were still viewing cars at 8 p.m. during the two days, while on normal days the last customers often leave at 6 p.m., a manager of a Toyota dealer in Ho Chi Minh City said.

"We needed six employees, double from before," he added.

The surge in demand for cars came as the government announced a decision to cut car registration fees by half for six months starting Dec. 1.

This is the second time in the last two years that such a cut is introduced to mitigate difficulties faced by the auto industry due to the Covid-19 pandemic.

For this reason, accountants and managers had to show up at dealers to finalize contracts when needed.

Some salespersons said they sold two or three cars last week, while before it often took them several days to sell one.

Customers can be divided into two main groups: those who want to prepare for the registration process when the fee drops by half starting Wednesday, and those who want to learn more about cars.

Dealers have ended some prior promotions because of the fee discount, which urge customers to come and make purchases.

"I am selling my existing car to buy a new one," said Le Luan, a customer, adding he plans to put down a deposit Tuesday fearing promotions would end Wednesday.

Registration fees are calculated based on car prices in each locality. The rates are 12 percent in Hanoi and Hai Phong, and 10 percent in HCMC.

In the first six months last year, 17,600 cars were bought on average each month. In the second half, when the 50 percent cut took effect, sales doubled.

Last year, car sales had fallen by 8 percent to 296,634 units as the Covid-19 pandemic badly affected the economy, hitting incomes and discretionary spending.

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