Cheap price automobiles flow into Vietnam after raising tax

The correlation diagram of the average price of imported cars less than 9 seats before and after July 1, 2016 , unit “ USD thousand/vehicle” Diagram by: Thai Binh

According to the General Department of Customs, at the end of December 15, the quantity of imported automobiles in the country reached 107,569 vehicles with a total turnover of $US 2.221 billion. Of which, the two largest imported kinds are trucks with 44,601 vehicles, total turnover of $US 912.5 million; and automobiles less than 9 seats with 48,772 vehicles, total turnover of $US 659 million.

Thus, compared to the first 6 months of 2016 (before the increase of the Special consumption tax for large capacity cars) the quantity of imported automobiles still flowed into Vietnam’s market.

Specifically, in the first 6 months, the country imported 49,676 vehicles with total turnover of $US 1.205 billion. Of which, the quantity of imported trucks was 21,828 vehicles with total turnover of $US 455 million and imported automobiles with less than 9 seats was 20,376 vehicles with total turnover of $US 373 million.

In the shorter time (nearly 6 months) from July 1, 2016 to December 15, 2016 the quantity of imported automobiles was higher than compared to the first six months was 57,893 vehicles (more than 8,217 vehicles). Of which, additional imported trucks were 22,773 vehicles; the increase of imported automobiles less than 9 seats was 28,396 vehicles.

However, on the turnover, while the total turnover of imported trucks increased by $US 2.5 million compared to the first months of 2016, the total import turnover of imported automobiles with less than 9 seats sharply reduced. Specifically, from July 1, 2016 to December 15, 2016 the import value of automobiles with less than 9 seats only reached $US 286 million, down $US 87 million compared to the first six months of 2016.

This shows that the average import value of cars less than 9 seats from July to now sharply reduced compared to the first six months of 2016. In that period, the average price of imported cars was $US 18,305/vehicle (the declared price not including all taxes- reporter), while from July 1, 2016 to now only reached $US 10,071. Thus, after July 1, 2016, the average price of imported cars with less than 9 seats fell 45% compared to the first months of 2016.

Related to the cheap price automobiles with low tax imported into Vietnam, a leader of the Hai Phong Port Customs Branch of Zone 1 (under the Hai Phong Customs Department)- one of the Customs Branches with a large quantity of imported automobiles, said from October, 2016 the Branch started to make Customs procedures for imported cars from RORO ships (the specialized ship carrying automobiles, before October this ship transported goods to the port areas in the Quang Ninh province). Up to now, there have been 5 RORO ships carrying automobiles which have arrived at Hai Phong Port.

According to the information of the Hai Phong Joint Stock Company, each RORO ship includes 1.000 automobiles of all kinds.

“However, the imported goods are mostly pickup trucks and cars with less than 9 seats which imported from Thailand so the tax collection is not as much as expected (due to the commitments under the bilateral and multilateral Free Trade Agreements)”- the leader of the Hai Phong Port Customs Branch of Zone 1 shared.