VietNamNet Bridge – While distributors of imported cars have announced they will lower selling prices, local manufacturers have not made any move.
When announcing the tax reduction on car imports, Deputy Minister of Finance Truong Chi Trung said that the prices of imports would lead to the price decreases of locally made products.
However, no local manufacturer has yet made a move towards lowering prices.
Gan Kok Seng, Deputy Director General of Honda Vietnam, affirmed that the tax cuts would have direct impacts on the prices of brand new imports and used imports, while not affecting the production cost of locally made cars.
Toyota Vietnam, Ford Vietnam and Lifan all said that they do not have any plan to lower the selling prices at this moment.
Michael Pease, Director General of Ford Vietnam, said that the tax reduction would not affect local production. The prices of several import models would decrease, but these are not the rivals of the domestically manufactured models. He said that there are two ways to get lower car selling prices, either lowering the luxury tax on locally made cars, or expanding the market (higher output will help lower prices). However, as Vietnam decided to lower tax on car imports under the form of complete built units, there would be many more cars on the market, i.e the market would be narrower, thus making the price reduction impossible. Meanwhile, representatives of several automobile manufacturers said that they would “keep close watch over the market and consider the satisfaction of clients on the products, and make price adjustments if necessary.”
In fact, local car manufacturers are not so unwise to think of reducing selling prices at this moment, when their products are selling very well.
The output of local manufacturers is not enough to meet the domestic demand. If booking a Toyota Camry right now, clients will only get delivery at the end of 2008.
Regarding the price decreases of imports, the decreases announced by Euro Auto and Hyundai Vietnam have not satisfied car buyers, who said that the decreases should have been bigger, because the tax cuts were big.
However, Huynh Du An, Director of Euro Auto, the distributor of BMW cars, said that the price decreases were ‘acceptable’ as the company faced an unfavourable exchange rate.
Mr An also said that the prices decreases would be different depending on the exchange rates between the greenback and the foreign currency used as the currency for payment.
For example, the products coming from European countries which use the euro like BMW would depend on the Euro/US$ exchange rate, the products from South Korea on the Won/US$ , while the ones coming from Japan on Yen/US$. The prices of BMW cars before/after the tax reduction based on Euro/US$ exchange rate:
|
Model
|
730Li
|
530i
|
325i
|
320i
|
|
Retail price with 80% tax
|
188,900 (US$)
|
126,800 (US$)
|
84,800 (US$)
|
74,800 (US$)
|
|
Retail price with 80% tax, exchange rate Euro1/US$1.34
|
188,900 (US$)
|
126,800 (US$)
|
84,800 (US$)
|
74,800 (US$)
|
|
Retail price with 70% tax
|
185,900 (US$)
|
123,800 (US$)
|
82,800 (US$)
|
72,800 (US$)
|
|
Retail price with 70% tax, exchange rate Euro1/US$1.4
|
186,115 (US$)
|
124,951 (US$)
|
83,706 (US$)
|
73,857 (US$)
|
|
Retail price with 70% tax, exchange rate Euro1/US$1.34
|
178,185 (US$)
|
119,642 (US$)
|
80,164 (US$)
|
70,736 (US$)
|
