Vietnam’s car sales hit record in 2016 amid tax cuts

                       Cars displayed at a motor show in Hanoi in 2016. Photo by VnExpress

The import tariffs for cars from Southeast Asia have been slashed and will be scrapped soon.

Vietnamese consumers bought 304,427 cars last year, an all-time high in the country’s history, Vietnam Plus reported Wednesday, citing data from the Vietnam Automobile Manufacturers’ Association.

Last year’s figure beat the previous record of 244,914 units sold in 2015, and nearly twice the number of 2009.

Sales of cars assembled in Vietnam jumped 32 percent, while imported units saw a 5 percent year-on-year increase, the association said.

Leading local carmaker Truong Hai Auto led the tally, moving 112,847 units in 2016 or 41.5 percent of the market. It was followed by Toyota Vietnam with 57,036 units, accounting for 21 percent of the market, and Ford Vietnam with 29,011 units, or 10.7 percent.

Industry insiders expect sales of small cars to keep increasing sharply in the near future as Vietnam lowered its tariff rate from 45 percent to 40 percent last July and plans to cut it further to 35 percent in 2018. The policy applies to cars with engines smaller than 1.5 liters, which currently account for about half of the local market.

Completely-built units from neighboring countries are given a more favorable treatment. Since January 1, cars from Southeast Asian countries have been subject to a 30 percent tariff, compared to 40 percent previously. This will be completely removed from 2018, as part of an agreement between regional countries.

A booming economy has created more wealth for local consumers, who are switching from motorbikes to cars, and from cheap cars to luxury models. The economy is expected to grow 6.7 percent this year.

By VnExpress