Automobile market sees recovery as government slashes fee

The combined sales of companies that belong to the Vietnam Automobile Manufacturers Association (VAMA), a business group of more than 20 auto manufacturers – with Hyundai being a notable exception -- in June reached 23,324 vehicles.

However, this represented a 13 percent decline from a year earlier.

VAMA said passenger cars accounted for 17,584 units sold in June, up 35 percent from May. Commercial vehicles were in second place with 6,109 and special-purpose vehicles in third with 309, respectively up 5 percent and 18 percent from May.

Prime Minister Nguyen Xuan Phuc signed a new decree on June 28 that cut first-time registration fees for locally made cars, trailers and semi-trailers towed by cars among others by half.

The cut will last through this year before returning to old levels on January 1, 2021.

The fees used to range from 10 percent to 12 percent of the car price depending on locality. For instance, it was 12 percent in Hanoi, the northern city of Hai Phong and northern Quang Ninh Province and 10 percent in Ho Chi Minh City.

While news of the impending fee cut caused a sharp rise in buying in June, overall sales in the first half of the year was much lower than in the same period in 2019.

In the first six months total sales of VAMA members, who account for more than 95 percent of the market, were down 30 percent year-on-year to 102,720 vehicles. Hyundai’s sales of 28,014 units represented a 22 percent fall.

Car manufacturers feared that the global effects of Covid-19 would have a long-term impact on people's incomes and auto demand.

VAMA has forecast sales to decline by more than 15 percent this year. Last year car sales had risen by 11.7 percent to 322,322 units, it said.