The General Statistics Office (GSO) on January 29 reported that the number of domestically assembled cars in January was 23,300, down 16.6 percent compared with December 2023 (27,900). However, the figure was still 14.6 percent higher than that of the same period last year.

The automobile output decrease in the first month of the new year was foreseeable, because January often coincides with Vietnam’s long Tet holiday

In 2024, though Tet will come in February, output still decreased, partially because the 50 percent vehicle registration tax-cut policy has expired, which means that domestically assembled cars no longer have an advantage over imports.

The total domestic automobile output in 2023 was 347,4000, down 12.3 percent compared with 2022.

Also, according to GSO, the number of CBU (complete built unit) imports in the first half of January 2024 (by January 15), was 1.053, worth $39 million. The figure represented a sharp fall of 83.3 percent in quantity and 75.9 percent in value compared with the same period last year.

While the number of imported cars was modest, the average unit price of imports was relatively high, $37,000 (VND910 million).

The General Department of Customs (GDC) reported Vietnam imported 118,942 CBU cars in 2023, valued at $2.83 billion. The figures, compared with 173,467 cars and value of $3.84 billion in 2022, represented falls of 31.5 percent in quantity and 26.3 percent in import turnover.

Imported cars mostly came from Thailand, Indonesia and China, accounting for 90.5 percent of total imports in 2023.

New policies taking place in early January 2024 will impact the automobile market.

On January 1, 2024, the 50 percent registration tax cut applied to domestically assembled cars expired. This means that from now on, buyers in Hanoi, Da Nang, Hai Phong and Quang Ninh have to pay a registration tax of 12 percent (for cars with fewer than nine seats), while buyers in Ha Tinh have to pay 11 percent. The tax rate is 10 percent for HCM City and other cities and provinces.

Prior to that, automobile manufacturers benefited from the 50 percent tax cut for the third time, valid from July 1, 2023 to December 31, 2023.

Since early 2024, the rolling-up cost of domestically assembled cars increased by VND50-60 million, with the figure up to VND100 million for luxury cars.

In December 2023, the government issued Decree 94 on VAT reduction. The goods and services subject to a 10 percent VAT can enjoy the 2 percent tax reduction, for a total of 8 percent VAT, from January 1, 2024 to the end of June 30, 2024.

Hoang Hiep