Cushendall road ballymena car sales

The Hanoitimes – With the Covid-19 impacts still looming on local economy, domestic car prices have gone down but remained nearly double the prices of vehicles sold in Thailand and Indonesia, mainly due to high fees and taxes for locally made cars.

Rising domestic production capacity and existing government’s support policies to cut fees and taxes for locally made cars are expected to be major factors dragging down car prices in Vietnam in the coming time.

Car production at Hyundai Thanh Cong manufacturing plant. Photo: Hoang Giang

A representative from the Truong Hai Auto Corporation (Thaco), one of Vietnam’s leading car manufacturers, expected the country’s participation in free trade agreements (FTAs) with major partners, including the EU, Japan, UK and South Korea, would help further abate costs for importing car parts with import duty at 0%.

With the Covid-19 impacts still looming on local economy, domestic car prices have gone down but remain nearly double the prices of vehicles sold in Thailand and Indonesia, mainly due to high fees and taxes for locally made cars.

“High product quality and low base cost are essential for Vietnam cars to compete with their foreign peers,” said auto expert Nguyen Minh Dong, adding only a bigger market size could attract more investors to come in to produce cars in the country and enhance localization rate.

Director of Hien Toyota noted while car manufacturers can streamline operation to drive down the production cost, taxes and fees are dependent on state policies.

“Lowering taxes and fees for cars will no doubt reduce prices and bring more benefits for customers,” she said.

Booming market demand

A recent report from the SSI Securities Corporation suggested Vietnam’s income per capita is on the rise and set to grow at an average of 8-10% in the next decade.

“Compared to regional countries, the current income per capita is fast approaching to a point of bursting demand for cars,” asserted the SSI, adding cars would soon move from the luxury category with a passenger vehicle density of 34 per 1,000 to a more ordinary one with a density level comparable to countries in the region.

The SSI also pointed to a key factor that the domestic car market is big enough for car manufacturers to shift from importing cars to assembling/manufacturing domestically.

At present, six major car manufacturers of Thaco, Huyndai, Toyota, Mitsubishi, Ford and Honda account for 90% of the market share in Vietnam with a combined production capacity of 30,000-60,000 units per year, exceeding the break-even point for domestically-produced cars of 30,000-40,000 cars per year for an assembling plant, or 10,000-20,000 units for each car model.

According to the SSI, domestic car production capacity  is increasing rapidly to meet customers demand, a key step to lower car prices.

With more cars manufacturing and assembling plants scheduled to complete in the 2022-23 period, the SSI expects a heating up car markets with steep discount policies would drive up domestic car demands.

Along with existing Vietnam’s support policies for the automobile industry, the National Assembly is currently discussing a possibility of reducing the excise tax rate for locally made cars, in which the specific reduced rate would be in line with the localization rate, aiming to boost sales of affordable car models.

The Hanoitimes – Cargo flights and vehicles are not affected by this ban.

The Vietnamese Ministry of Transport decided to suspend all passenger transport services to and from Danang from 12am of July 28, complying with a social distancing order in the resort city.

Local tourists are waiting to check in at Danang airport on July 26. Photo: VnExpress

The decision will be in place in next 15 days to deter the outbreak of the novel coronavirus in the city.

As such, all passenger flights between Danang and other localities are suspended.

Regarding road transport, the ministry requested all inter/intra-provincial transport services including contracted cars, taxis, and buses from/to the city to stop, except for special cases. Passenger vehicles going through Danang are not to be allowed to stop and park in the city.

Train services to Danang are also suspended. North-South passenger trains are not allowed to pick up or drop off passengers at Danang station. Ships and river boats must stop transporting passengers from and to Danang, except for special cases.

Cargo flights and vehicles are not affected by this ban.

In the evening of July 27, Vietnamese air carriers were ordered by the Civil Aviation Administration of Vietnam to increase the number of airplanes to airlift tourists out of the city before 12pm of the same day.

From 12am of July 28, six districts with around one million people in Danang have been put under lockdown and transport services are banned in the city.

As the first local virus infection was detected in Danang after months without community transmission, measures during the social distancing period will include wearing of face masks in public places and public means of transport, the suspension of non-essential services, entertainment activities and public transport, and limiting private vehicles.

Meanwhile, three hospitals namely Danang Hospital, Danang C Hospital, and Danang Orthopedics and Rehabilitation Hospital, and residential areas nearby will be put under lockdown.

In the past three days, Vietnam reported 15 new SARS-CoV-2 infections in Danang city and Quang Ngai, raising the country’s caseload to 431.