Automobile makers and importers are looking to the upcoming Vietnam
Motor Show in Hanoi as not only a trade exhibit, but also a forum to press
their concerns about tax and fee policies that affect their business.
High taxes and fees are key
reasons for the slump of automotive market in Vietnam during the past two
years, said Laurent Charpentier, general director of Ford Motor Vietnam and
chairman of the Vietnam Automobile Manufacturers’ Association (VAMA). “The
automotive industry in a dire situation,” he said.
The proliferation of compacts,
luxury rides and SUVs has become a vivid symbol of Vietnam’s rising
prosperity—and a conspicuous contributor to traffic jams. But VAMA members
argue that the current regime of taxes and fees is short-sighted, and a stalled
automobile industry will prove damaging to Vietnam’s economic future.
To attract more foreign
investment to Vietnam’s auto industry, a reduction in taxes and fees on cars is
needed, they said.
“Unlike other motor shows held in
the past, this year many car-makers and car-importers registered to take part
in the conference. They want to raise their voice in protesting government’s
tax and fee policies imposed on the automotive industry,” exhibitor
representative Tran Tan Trung said at a recent press conference heralding the
event.
The Vietnam Motor Show 2012,
scheduled for September 26-30 in Hanoi, as expected to be the largest exhibit
of its kind ever in the nation, featuring a wide array of models.
Trung, also general director of
Lien-A International Joint Stock Company, an official dealer of Audi brand
models in Vietnam, said the organisers would invite policy-makers to the
conference to hear suggestions from car-makers and car-importers.
Customers were reluctant to buy a
vehicle, Charpentier said, because the registration fees at 15 per cent or 20
per cent in Ho Chi Minh City and Hanoi respectively were too high, and the
planned annual fee to limit vehicle personal usage was unaffordable to most of
the customers.
At this time, auto prices in
Vietnam are about three times higher than it is in the United States, even
though Vietnam remains a developing country with annual per capita income of
around $1,300.
Policies that promote cars sales
in Vietnam, Charpentier argued, would also promote Vietnam’s geographic
position as a potential hub of the automotive industry in South Asia and
favourable role in the global supply chain.
As it is, the precipitous tumble
of auto sales was not only worrying automakers assembling vehicles in Vietnam
but also deterring spare part suppliers from investing in this country, he
added.
A representative of Toyota
Vietnam, a subsidiary of Japan’s Toyota Motors Corporation, said car-makers and
spare part suppliers could not further expand investment in Vietnam because of
the current small scale of Vietnamese automotive market. In the case of Toyota
Vietnam, the company is just assembling cars in a factory in northern Vinh Phuc
province with localisation rate at around 10 per cent after 16 years of
operations.
Ngoc Linh | vir.com.vn
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