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Mar 31, 2013

Vietnam - Viet Kieu repatriates’ car imports waiting for re-export

VietNamNet Bridge – The luxurious cars, which were imported to Vietnam as the Viet Kieu repatriates’ assets, now are awaiting to be re-exported, after state management agencies have threatened to clarify the real origins of the imports.

Tran Thi TT in HCM City has asked for the permission of the customs agencies to re-export a Lexus ES350, made in 2012 and brought to Vietnam in early 2013.

Tran Thi TT is a Viet Kieu (overseas Vietnamese) who has both Vietnamese and US nationalities. TT said she has decided to re-export the Lexus car to the US, because she fears that it would take her too much time to have the information about the cars to be verified by the competent agencies before they grant licenses.

“This would have negative influences to my works. Besides, I would have to pay for the storage fee, which is really costly,” she said.

“The car, while being kept at the storehouse, may get broken down and rusty. A lot of other risks may also occur,” she continued.

The Viet Kieu has shown a strong determination to re-export the car to the US, committing to pay all kinds of fees as stipulated by the laws.

A customs official, who asked to be anonymous, said customs agencies have received some proposals like TT’s recently. Especially, the petitions mostly come from Viet Kieu, and the cars were imported by the Viet Kieu as their private assets.

He said that it’s not by chance that the proposals have been made recently, after the state management agencies announced they would take drastic measures to clarify the real origins of the car imports and stop the illegal imports.

Under the Circular No. 118 of the Ministry of Finance, every Viet Kieu repatriate can bring with himself to Vietnam a car that he is using. The car would be exempted from the import tax and the VAT.

The preferences, plus the tightening over the car imports both have prompted people to forge documents of Viet Kieu repatriates to evade tax when bringing luxury cars to Vietnam.

Local newspapers have reported that many rings that bring the cars to Vietnam under forged documents have been found. Every Viet Kieu can receive up to $8,000 for “leasing” his name to the rings which then bring cars to Vietnam.

The rings have been found out after the police discovered some “abnormal things” in the car imports. Some old people, for example, have been found as bringing high cylinder capacity (over 175 cc) motorbikes to Vietnam.

The Ministry of Industry and Trade has noted the sharp increase in the number of luxury cars imported to Vietnam recently. In the first 11 months of 2012 alone, 70 luxury cars of Viet Kieu repatriates were allowed to enter Vietnam, the number that 4.7 times higher than that in 2011 and six times than that in 2010.

The Ministries of Public security and the General Department of Customs, while reviewing the luxurious car imports, said they saw the “boom” of luxurious imports in 2012.

Local customs agencies, port authorities and public security departments in six provinces and cities, including Hanoi, HCM City, Hai Phong, Da Nang, Quang Ninh and Ba Ria-Vung Tau have joined forces to hold in custody the motorbikes and cars which have arrived at ports. The vehicle importers have been declared as the assets of Viet Kieu repatriates.

Compiled by C. V

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Mar 17, 2013

China - China Goes for Luxury Cars

Recession, corruption investigations slowing sales only slightly

China's luxury car market, which has been growing at a blistering pace as a rising upper middle class looks for rolling status, looks like it is on track for 20 percent growth in 2013 despite what happens to the rest of the auto segment, analysts say.

While the overall car market grew by only 7 percent in 2012 as China's economic performance slowed, luxury cars - a market largely owned by the Germans - grew 20 percent last year. According to a new report by the McKinsey consulting firm, and titled Upward Mobility: The Future of China's Premium Car Market, while passenger car sales have improved at a 26 percent clip overall, luxury car sales have been averaging 36 percent annual growth.

One shadow on the horizon could well be the war on corruption that incoming Chinese leader Xi Jinping and Prime Minister Li Keqiang have already begun waging. Twenty-seven top cadres have already been relieved of duty on corruption charges. Nervous cadres at the National People's Congress have asked that the leadership slow the pace of reform lest it wreck the Communist Party. Economists have reported that banquets have fallen drastically in number and that the sales of other luxury goods have slowed.

McKinsey, in its report, said that macroeconomic conditions have created "increasing concern in the auto industry about the volatility of demand for premium cars in China and what that means for continued market growth." In its survey, however, the consulting firm said, " despite some uncertainty about the direction of the economy, and shifting social attitudes about public displays of wealth, 80 to 85 percent of Chinese consumers surveyed are confident in future growth and will continue to buy premium cars.

As an indication of how lucrative the market is, the average Chinese car buyer opts for a new model ever six to eight years. The buyers of premium models - those just a cut below the serious luxury models put out by Rolls-Royce, Bentley and the McLaren, Lamborghini and Ferrari supercars—change every two to three years.

McKinsey & Co. estimates that premium car sales in China will surpass US sales by 2020. In 2012, according to the report, the Chinese bought 1.25 million premium vehicles, second only to the Americans' 1.7 million. Sales are expected to three million by 2020, equaling those of Western Europe, and surpassing the 2.3 million sales expected in the US market, McKinsey says, with China possibly overtaking the US as the largest premium car market as early as 2016.

How long the Big Three Germans—Mercedes-Benz, BMW and Audi - can hold onto the luxury market is debatable. A survey of Chinese respondents found that a majority of them expect Chinese automakers to be producing their own premium cars within 10 years.

Nonetheless, other international automakers want to swarm into what they perceive as a nearly limitless market. Apparently heartened by the strong performance of its Buick marque in China, General Motors is entering the market with its top-of-the line Cadillac. Nissan wants to bring in its luxury Infiniti but is doing its best not to identify it as a Japanese car. Japanese consumer products of all kinds haven't recovered from dramatic drop-offs in sales as a result of xenophobia over the uninhabited Senkaku/Daioyu Islands, which both China and Japan both claim as their own

In the wake of the confrontation over the islets, Toyota's and Honda's sales in the first two months of 2013 fell13.3 percent and 4.1 percent respectively, while Nissan's fell 14.1 percent, although that was better than their expectation of a 20 percent fall. And, while dealers report that the worst is over, there has been no return to pre-boycott sales levels.

By contrast sales for Audi, which sold more than 400,000 units in 2012, rose by 29 percent, apparently benefiting from the fact that Audi was the first major carmaker into the Chinese market, teaming with the state-owned First Auto Works in 1988 with an agreement to share technology in an agreement under which 499 Audi 100s would be built. Part of the reason for Audi's success is built on its Q5 SUV as wealthy buyers, as they have in other countries, have increasingly turned to luxury SUVs instead of sedans.

BMW sales also rose strongly, by 40 percent in 2012. However, Mercedes-Benz, elsewhere considered the world's most prestigious premium carmaker - rose by only 4 percent, apparently because its sales structure is fragmented into two distribution organizations, one run by Mercedes itself affiliated with a local dealer for cars imported from Germany and another for cars build locally with another state-owned company, Beijing Automotive. While Audi and BMW outperformed the market, Mercedes-Benz's sales growth has dropped out of the first tier.

The reasons for buying premium cars are changing, McKinsey found. While the first generation bought cars for status and the ability to show off, the new McKinsey survey found that while 30 percent cited "reflection of social status" and 27 percent cited "self-indulgence," others said the car was in effect a ‘business card' for credibility, others were attracted by sophisticated functions and innovative designs, and the car as a "source of fun in life. More than 60 percent of respondents regarded buying a car as much a priority as buying an apartment or paying for their children's educations.

The other major change, McKinsey said, is that women are taking a more active role in buying cars, valuing exterior styling, safety features, and comfort over the attributes favored by their male counterparts, such as powertrain technology, socially recognized premium brands, and bigger models.

http://www.asiasentinel.com

Mar 1, 2013

Vietnam - How luxury cars come to Vietnam?

VietNamNet Bridge – Most of the luxury cars have been imported to Vietnam as the assets of Viet Kieu repatriates. There are the rings that bring the cars to Vietnam under forged documents.

Kim Q, the owner of a nail shop in Portland City of Oregon State in the US, said that she was once asked to join a ring which created forged documents about Viet Kieu repatriates and brought luxury cars to Vietnam.

Q said that her family once needed a big sum of money to start up a business. HS, a Vietnamese in Australia then called her, saying that she could earn some money by “lending the names and information.”

The man said that if she just left Vietnam and still did not have the US citizenship, she would need to show the passport granted by the Vietnamese administration and the “green card.”

After following necessary procedures, a company in HCM City would contact Q and buy her an air ticket for her flight to Vietnam, where she would stay for four weeks.

After arriving in the Tan Son Nhat airport, Q would receive an advance of $2,000 on fee from the company. If the cars can safely come to Vietnam, the company would pay the remaining $6,000.

However, Q then decided not to join the ring, after she called a relative in HCM City to consult with him about the deal. She was told that the police were making investigation on similar cases.

Q was not the only one who was asked to “lend the name” to help bring luxury cars to Vietnam. Thanh Nien newspaper reported that the General Department of Customs discovered some abnormal things with the Viet Kieu returning to Vietnam.

The abnormal things were that though the Viet Kieu had modest income, they always brought with themselves to Vietnam very expensive cars worth hundreds of thousands of dollars.

The police have also requested the General Department of Customs to provide relating documents to clarify the car imports that it believed were smuggled to Vietnam with the declarations that these were the assets of Viet Kieu repatriates.

Luxury cars arrive in Vietnam in masses

Under the Circular No. 118 of the Ministry of Finance, every Viet Kieu repatriate can bring with himself to Vietnam a car that he is using. The car would be exempted from the import tax and the VAT.

The preferences, plus the tightening over the car imports both have prompted people to forge documents of Viet Kieu repatriates to evade tax when bringing luxury cars to Vietnam.

The Ministry of Industry and Trade has noted the sharp increase in the number of luxury cars imported to Vietnam recently. In the first 11 months of 2012 alone, 70 luxury cars of Viet Kieu repatriates were allowed to enter Vietnam, the number that 4.7 times higher than that in 2011 and six times than that in 2010.

The ministry has also pointed out that 90 percent of the Viet Kieu repatriates’ imported cars are luxurious models with the brands of Lexus, Porsche, BMW, Audi, Land Rover. Especially, these also included super cars such as Bugatti Veyron, Bentley Continental Flying Spur.

Opinions from the well informed circle said that of the 70 super cars present in Vietnam, only two have been imported through the official channel, while the others have been declared as the assets of Viet Kieu repatriates.

Lao Dong

Oct 21, 2012

Vietnam - Luxury cars hit with higher tariffs

The General Department of Customs has imposed new tariff rates on new and second-hand luxury automobiles imported on or after October 18. Under the new tax directive, the taxes levied on new and used cars increase by $8,000 to $22,000 per unit.

The General Department of Customs said the issuance of the new tax directive would also help authorised agencies manage tax calculations and avoid trade fraud and tax evasion by importers.

The highest tax increase of $22,000 would be imposed on a new Lexus GX460, lifting the total tax to $65,000 per unit.

New Toyota Camry and Toyota Venza models would be subject to tariffs of $21,000 and $25,000, respectively, an increase of $3,000 per unit.

A used Honda Acura ZDX Advance would be levied a tariff of $60,000 per unit, an increase of $15,200, while an Audi Q7 would be subject to a tax of $39,000 per unit, an increase of $8,000.

By late September, the total number of automobiles imported so far this year had reached 19,800 units, worth $448 million, a decline of 56 per cent in volume and 47.2 per cent in value compared with the same period last year.

Vehicles of fewer than nine seats accounted for 9,880 units of this figure and a value of $104 million, a drop of 66 per cent in volume and 72 per cent from last year.

Imports of completely-built automobiles into Vietnam in September alone stood at 1,980 units, with a value of $62 million.

Re-exports banned

The temporary importing of used cars and motorbikes destined for a third country has been banned until further notice.

Deputy Minister of Industry and Trade Tran Tuan Anh said the ministry was working with other ministries to produce a circular on the regulations covering temporary imports.

Businesses involved in the process or in trading goods such as wine, beer, tobacco and cigars and others which carry a consumption tax must have operated in the export field for at least two years.

In addition, businesses involved in temporary importing must deposit at least VND5 billion ($239,000) as a bond against environment problems and the possibility that goods get damaged and could not be exported.

Temporary imports are permitted to stay in Vietnam for 45 days instead of the previous 180 days. However, customs may allow one extension of time for up to 15 days, after which the goods are liable to be confiscated.

The Ministry of Industry and Trade has issued Decision No 5737/QD-BCT dated September 28, detailing the list of goods suspended from temporary imports.

VNS

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Oct 16, 2012

Vietnam - Cars with diplomatic licence plates to be checked

VietNamNet Bridge – As thousands of cars with diplomatic licence plates are being used improperly, causing tax losses to the state budget, Deputy Prime Minister Hoang Trung Hai has asked relevant bodies to immediately review the management, distribution of and handle violations related to this type of cars.

Deputy Prime Minister Hoang Trung Hai has instructed the Ministry of Foreign Affairs, Ministry of Finance and Ministry of Public Security to immediately check the management, distribution of and handle violations related to using cars bearing diplomatic number plates in Vietnam.

He also requested these ministries to review their responsibilities, to report and recommend to the government the management mode, assignment of responsibilities of government bodies in the control of cars bearing foreign diplomatic number plates, to suit the requirements of the new situation.

Before October 25, the Ministry of Finance has to report to the government the development and promulgation of the regulations on temporary import, re-export, destruction and transfer of cars and motorbikes that enjoy diplomatic incentives and immunity.

Earlier, the media reported that over 4,000 foreign cars were imported into Vietnam from 1998 to the end of August 2009. In particular, thousands of cars are "floating" in the market, without fulfilling the transfer procedures or having been transferred but not pay taxes.

Compiled by Le Ha

Sep 25, 2012

Vietnam - Car taxes, fees take spotlight

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

Sep 18, 2012

Vietnam - One shocking policy for ever year makes auto market reel (Part 1)

VietNamNet Bridge - Automobile manufacturers, authorized distribution companies and private car dealers have always been suffering a constant anxiety about the changeable policies. New decisions would be released by government agencies at any times which may destroy their business plans.

VietNamNet here reviews the big changes in the policies relating to the automobile industry that occurred in the last nine years.

2003: car part import tariff up

Since January 1, 2003, the car part imports for making less-than-10-seat products under the mode of CKD 1, CKD 2 (complete knock down) and IKD (incomplete knock down) began bearing higher import tariffs.

CKD car part imports, mostly used by automobile joint ventures to assemble automobiles, then saw the import tariff increasing by five percent, from 20 percent on average to 25 percent.

Six months later, the government decided to raise the car (with less than 7 seats) and motorbike ownership registration tax to five percent--applied to the registration in big cities and provinces.

The decisions on raising the import tariff on CKD imports and ownership registration tax then led to the car price increase of 5-8 percent.

2004: luxury tax raised to 24 percent

Since 2004, the luxury tax imposed on the cars with less than five seats rose from five percent to 24 percent, which was believed to lead to the 35 percent car price increase.

Anticipating the car price increase, the automobile market got scorching hot in the last months of 2003, when people rushed to buy cars at the moments to avoid the upcoming high taxes. The unexpected demand increase then led to the terribly short supply. Those, who tried to buy cars in 2003, were asked by the sales agents to pay additional fee of nearly 1000 dollars to get deliveries in the year.

However, the scorching hot automobile market turned cold in early 2004 with the sharp falls of sales. The higher tax then drove to the 26 percent car sales in the year.

Since 2004, Vietnam began opening its market for brand new complete-built-unit (CBU) cars, imposing the high import tariff at 100 percent.

2005: luxury tax raised to 40 percent

In 2005, the car prices, once again, skyrocketed amid the news that the luxury tax on sedans would be raised to 40 percent. People rushed to buy cars in the fourth quarter of 2004 to avoid the higher tax applied as of early 2005.

The sharp increase of the demand then prompted automobile manufacturers to increase their capacity.

However, the market later turned frozen with no buyers, because the tax was raised. As a result, the automobile market in 2005 witnessed the sales down by 32 percent.

No one could imagine that the car market bounced back in late 2005, when customers were told that the luxury tax would increase to 50 percent commencing from 2006.

2006: Luxury tax raised to 50 percent

The car prices increased sharply in 2006, with the sedan models seeing the price up by 3000-5000 dollars. Only seven seat cars saw the price increases of less than 3000 dollars, explained by the fact that the luxury tax on the cars was low at 30 percent.

Since 2006, used cars have been allowed to enter Vietnam. However, used car import consignments could only go through the four seaports in HCM City, Da Nang, Hai Phong and Cai Lan, and borne very high import tariff of 458-600 percent.

In 2006, the Ministry of Finance released the decision on lowering the import tariff on CBU imports from 100 percent to 90 percent.

Tran Thuy

Aug 16, 2012

Vietnam - Hanoi considers cutting off park areas to build car parking lots

VietNamNet Bridge – After giving a nod to a series of steel made car parking lots in many areas, the Hanoi authorities are now considering setting up car parking lots in parks or public flower gardens. Urban development programmers have warned that this would damage the green space of the capital city.

The Hanoi authorities have recently allowed a company to develop the project on building up a steel truss for parking cars at the corner of the streets of Nguyen Dinh Chieu – Tran Nhan Tong, within the campus of the Thong Nhat Park in Hai Ba Trung district in Hanoi.

The project is expected to kick off in 2013, covering an area of 3000 square meters in the Thong Nhat Park. The car park, including 17 4-storey blocks would have the capacity of 400 cars once operational.

Prior to that, the company put forward the plan on building up a car park in the Van Mieu – Quoc Tu Giam Park with the containing capacity of 2000 square meters, enough for 80 cars. However, the project was rejected by the Hanoi Architecture Department.

Meanwhile, besides the above said project, the department has suggested that the company should team up with the Hanoi Construction Programming Institute and the Thong Nhat Park Development Company to submit the plan on another multi-storey car park area in the Thong Nhat Park. The department said the new car park would serve the activities of the Thong Nhat Park and serve the demand of local residents.

As such, if the city approves the project, there would be two car parks within the Thong Nhat Park. Dao Ngoc Nghiem, former Director of the Hanoi Architecture Department, affirmed that in principle, all public works must reserve land for car parking. However, he said, it’s necessary to reconsider the purpose of the project, and that the urban development programmers should rethink their project, if the project just aims to serve local residents.

Tran Trong Hanh, former President of the Hanoi Architecture University, agrees with Nghiem, saying that the majority of the land in parks should be reserved for greenery, water surface and entertainment works. Meanwhile, the existence of car parking areas would spoil the beauty and the green space of the parks.

“I strongly believe that it’s necessary to reconsider the building of a car parking. You should not put both your legs into one trouser leg,” he said.

Nghiem went on to say that the traffic development program has reserved the land fund for car parking areas, and that it’s necessary to focus on developing the programmed car parking lots.

The parking areas on Tran Nhat Duat, Co Tan and Hang Dau streets should be seen as the solutions for the inner city.

Nghiem also said that Hanoi is now lacking area for verdure; therefore, any commercial projects should avoid “invading” the land area for greenery.

Hanoians have been miserable because of the lack of car parking areas. With the modest land fund for transport infrastructure development, accounting for 6.8 percent of the total land area, and the rapid increase in the number of private vehicles, Hanoi has always been seriously lacking areas for static traffic.

The problem has become even more serious recently, when the city’s authorities decided not to organize car keeping services on 262 streets in Hanoi, which was explained as aiming to ease the traffic jam.

However, while the traffic jam has been eased, car and motorbike owners have become miserable because they have nowhere to park their vehicles.

Binh An

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Jul 17, 2012

Vietnam - Electric cars don’t attract domestic auto manufacturers

VietNamNet Bridge – Automobile manufacturers believe that despite the great advantages, electric cars would not be favored in Vietnam in the near future.

Russian automobile manufacturer Yo Auto is going to sign a cooperation agreement with a Vietnamese partner on building a factory specializing in making electric cars.

This seems to be the only piece of good news these days, when domestic automobile manufacturers repeatedly complain about the slow sales and warn about the possible leave of the “big guys” from Vietnam.

Dat Viet has quoted its sources as saying that Yo Auto would team up with the Vietnamese partner to set up a joint venture to build a factory specializing in making Yo Mobile electric hybrid cars.

The factory is expected to have the capacity of 100,000 cars a year. The investment plan was initially planned to be inked in May 2012, but the signing has been delayed until early 2013 because of some reasons.

However, operational automobile manufacturers seem to keep indifferent to the information, believing that it’s now not the right time for developing electric cars in Vietnam, even though these cars have great advantages. Especially, the cars use clean fuel, do not cause noise and do not cause pollution to the environment.

Pham Anh Tuan, a senior executive of Toyota Vietnam, thinks that it’s a bit too early to invest in the electric car technology development now, even if the government of Vietnam offers investment incentives to the “clean vehicle manufacturers.”

However, Tuan believes that the Russian investor has his reasons to move ahead with the hybrid car project.

“I believe that Yo Auto plans to make cars in Vietnam to export to other countries, not to consume in the domestic market,” Tuan said. “The output of 100,000 cars a year announced by the manufacturer, once again, affirms my prediction.”

Analysts have also thought that the Vietnamese market is too small for automobile manufacturers. Over 20 automobile corporations have been operational in Vietnam – the small market which consumes only 120,000 cars a year. Especially, the sales in 2012 are believed to decrease to 80,000 cars due to the economic difficulties which have forced people to cancel the plans to buy luxurious items.

Therefore, the manufacturers setting up production bases in Vietnam would not target the Vietnamese market.

In order to develop the vehicles running with clean fuel, Vietnam needs to have a good infrastructure system. Electric cars need to have the battery charged regularly, while there has been no charging station so far.

The biggest outstanding feature of electric cars is that they friendly to the environment. However, this is not an important factor Vietnamese people would consider when choosing cars. To date, Vietnamese people still favor petrol-run motorbikes, even though the petrol price has been increasing. Electric bicycles and electric motorbikes have been available in Vietnam for a long time, but they have been selling very slowly.

When asked about the prospect of the clean fuel vehicle production in Vietnam, Tuan said that only if the government gives support, will the production be able to develop.

Existing automobile manufacturers can absolutely make investments to make electric cars, because investments needed for an electric car manufacturing factory would not be higher than the investment capital for petrol-run car factory. However, it will be impossible if only one enterprise comes forward and makes electric cars. One manufacturer alone will never be capable to build charging stations nationwide.

Source: Dat Viet

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Mar 22, 2012

Vietnam - Huge cost for owning a car in Vietnam

VietNamNet Bridge – No place in the world like Vietnam--where people have to pay three kinds of taxes and seven types of fees to use a car.

As a result, car prices in Vietnam, a developing country, are around 2.5 folds higher than that in the USA.

To import a brand-new five-seat car into Vietnam, one must pay three kinds of taxes: import tax (82 percent), luxury tax (30 percent for car of over five seats and 50 percent for cars of five seats downwards) and value added tax (10 percent).

Let’s do a calculation with an imported Hyundai SantaFe. If the price of this car is $23,000 in the USA, when it comes to Vietnam, its price will be: $23,000 + imported tax of $18,860 + luxury tax of $20,930 + VAT of $6,280 = $69,000. The total taxes for this car are up to $46,070.

Users will also have to pay up to seven types of fees, as of June 1, 2012, when the fee for road maintenance takes effect, including: registration fee, number plate fee, inspection fee, insurance, gas fee, road maintenance fee and the fee for stabilization fund.

In addition, if the Ministry of Transport’s proposal to collect the circulation fee and the fee to get into the downtown of big cities are approved, car users will have to pay more.

If one buys an imported SantaFe and he lives in Hanoi, this man will have to pay $13,800 of registration fee (20 percent), VND20 million ($1,000) for the license plate, plus VND5.4 million ($260) for inspection fee for 30 months, VND180,000 ($9) of road maintenance fee per month.

If the circulation fee is approved, this man will have to pay an additional VND75 million ($3,300) for 2.5 years (VND30 million or $1,500/year) in the first car inspection.

In total, this man will have to pay $83,000 (both taxes and fees) to run this car while it is priced only $23,000 in the USA and American have to pay a total of $35,000 to run the car.

According to the Ministry of Industry and Trade, Vietnam’s per capita income was $1,300 in 2011. Meanwhile, the figure was $47,084 for American. The dream of having a car is getting very far for most of Vietnamese.

That is only the initial investment in that car. To “maintain” it in Vietnam, it is also a big problem.

As the gas price is rising, one will have to pay around VND4.5 million ($220) for gas if he runs 2,000km per month and around VND2-3 million ($100-150) for parking fees. If the circulation fee is imposed, he will have to pay and additional of VND2.5 million ($110) per month. The total spending for a car is estimated at nearly VND10 million ($500) per month.

The advice of experts for Vietnamese is: if you earn at least VND50 million ($2,500) per month in Vietnam, you should buy a car.

How many percentage of Vietnamese people who earn at least VND50 million a month to be able to “maintain” a car?

Let’s share your comments with us through evnn@vietnamnet.vn.

Duc The

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Singapore - Car workshops and other carpark abusers

How do you issue a summons to a car without a licence plate? You can't.

So some workshops in Sin Ming Industrial Estate have taken to removing the licence plates on vehicles waiting to be serviced or repaired and leaving the vehicles in a public carpark, it appears.

Even the road tax discs which bear the vehicle's plate numbers have been removed from the windscreen.

Residents with season-parking coupons are angry that these "unlicensed" vehicles have taken up spaces in their carpark, forcing them to either wait longer for an empty space or to park further away from their home.

Residents told The New Paper that the parking woes surfaced in the last one to two years.

Mr Ang Eng Seng (right), 53, a plumber who lives in Block 25, Sin Ming Road, said it was especially difficult to find parking between September last year and the Chinese New Year festive period, when business was brisk at the workshops.

He said he saw more cars being sent to the workshops to be spray-painted during that time and sometimes more than 10 parking spaces would be taken up by such cars. Some of the cars were parked overnight to let the paint dry.

The situation has since improved slightly but he said sometimes he still needs to wait up to 30 minutes if he wants to park directly under his block.

Otherwise, he would have to park near Block 26, which is about 10 minutes' walk from his flat. Said Mr Ang in Mandarin: "If they remove the vehicle licence plate, it means that they are not paying road tax right? So they should be towed away.

"It's not fair for those of us who buy season parking. What's the point of buying season parking if I have to park so far away?"

Another resident who wanted to be known only as Mr E Lee, 24, an undergraduate, said that when he alerted HDB to the problem about six months ago, he saw some officers in the carpark pasting towing notices on the vehicles.

But it didn't solve the problem, he said, as those vehicles were simply moved away and replaced by other vehicles from the workshops.

Said Mr Lee: "On weekends, the cars are still there and it irks me.

"The ones doing the enforcement are the carpark attendants, but when they see a car without a licence plate, what can they do? They cannot possibly write down the specifications of the vehicles on their devices."

Lediati Tan

AsiaOne

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Mar 21, 2012

Vietnam - Car owners will be bent with taxes and fees

VietNamNet Bridge – It is estimated that when the new tax and fee regulations take effect, the total sum of money every Vietnamese person has to pay to possess a car would be 2.5 times higher than in the US.

Road maintenance fee makes the burden on enterprises heavier

With more and more kinds of taxes and fees, the dream of owning cars by Vietnamese people is getting further away. In the time to come, if the three kinds of taxes and fees are applied, every individual and business in big cities would have to bear 10 different kinds of taxes and fees.

On March 13, 2012, the government promulgated the Decree No. 18/2012 stipulating the establishment of the road maintenance fund. The government assigned the Ministry of Finance to set up the fees for using roads which will be imposed annually on every vehicle.

Regarding the kind of fee, the Ministry of Transport has suggested the fees of between 180,000 dong and 1.44 million dong a month for 7 different car groups. Do Van Quoc, Director of the Finance Department of the ministry, said that the Ministries of Transport and Finance would compile a circular, stipulating the fees and the way of collecting them.

It is expected that the circular would by released in April, so that the vehicle owners would begin paying fees from June 1.

Prior to that, the Ministry of Transport proposed to collect a new kind of fee – vehicle circulation fee - estimated to be at 20-50 million dong on every vehicle per annum. Besides, the cars entering the central areas of big cities (Hanoi, HCM City, Da Nang, Can Tho and Hai Phong) in peak hours would have to bear another kind of fee.

If all the three kinds of fees are applied, every car, no matter if it is in circulation or in garage, would bear 8 kinds of fees and surcharges in total. The cars entering the central areas of big cities would have to bear 9 kinds of fees.

Car buyers will not only bear more kinds of fees, but higher tax and fees as well. The car ownership registration tax has been raised from 12 percent to 20 percent in Hanoi and from 10 percent to 15 percent in HCM City, while the fee for car number plates has been raised from 2 million dong to 20 million dong.

As such, if counting on the three kinds of taxes calculated on the import prices, including the import tax (on complete built unit cars and CKD – complete knocked down), luxury tax and VAT, the total number of tax and fee types would be 11 or 12.

An expert has said that the total sum of money a Vietnamese person has to spend to “feed” his car would be 2.5 times higher than in the US, the country with the income per capita tens of times higher than Vietnam.

For example, a person residing in Hoan Kiem district in the central area of Hanoi, if owing a Toyota Camry 2.5 imported from the US, with the taxable price of 5,000 dollars, would have to pay the taxes and fees as follows: 20,750 dollars in import tax (CBU cars), 22,875 dollars in luxury tax and 6800 dollars in VAT. As such, the price of the car the buyer has to pay is 75,500 dollars in total.

After that, he would have to pay 15,000 dollars in car ownership registration tax, 20 million dong (1000 dollars) to get a car number plate, and 5.4 million dong for the first-time registration fee. If converting the sums of money into dong, the sum of money he has to pay would exceed 1.9 billion dong.

However, these are just the “basic fees” which give the car owners the right to put their cars into circulation.

And from June 1, with the new three types of fees, the Camry would bear a series of expenses more. Every year, he would pay 2.16 million dong in the road maintenance fee, 30 million dong in circulation fee.

Source: TBKTVN

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Mar 15, 2012

Vietnam - Motorbike and cars to pay road use fees from June

HA NOI – Motorbikes, cars and trucks and other engine vehicles throughout the nation will pay a road-use fee from June 1 to provide funds for road maintenance.

The funds, to go into the State Treasury account, will be divided into two parts, a central fund and a local fund, according to Decree 18/2012/ND-CP issued on Tuesday.

Fees collected from cars will go to the central fund (65 per cent) and to local funds (35 per cent). Motorbike fees will go to the local funds of each locality.

The central fund will be used to maintain the national road system while local funds would maintain local traffic streets and road systems.

Road Administration deputy chairman Nguyen Van Quyen said all current State fee collection stations would cease to operate in due course, except those under a Build, Operate and Transfer contract.

Quyen said the ministries of Transport and Finance were working together to prepare invoice demands for the fees for each vehicle owner by next week.

The Transport Ministry had earlier suggested that road-use fees for cars would be from VND180,000 to 1,440,000 (US$9-70) per month, payable by ticket purchase, with quarterly and annual tickets available.

Motorbikes would pay VND80,000 to 150,000 ($4-7.5) per year in one instalment.

Cars owners could pay their fees at registered centres while motorbike owners would pay their fees at collection offices designated by local authorities.

The Ministry of Transport has estimated about VND6 trillion ($286million) a year would be collected from road-user fees which, when added to the current State budget for road maintenance, would meet 80 per cent of requirements.

They also calculated that after two years the State budget for maintenance would be reduced and after 12 years the fund would fully cover road maintenance demands.

VNS

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