The Ministry of Finance (MoF) pointed out last week that as the pandemic was now broadly under control, it was no longer appropriate to continue to reduce the registration fee for domestically manufactured and assembled cars.

“The support of 50 per cent of the registration fee for cars manufactured and assembled in the country has achieved its set goals. This policy has had a positive impact on consumers, car manufacturers and distributors, and the economy in general,” an MoF statement said.

It is estimated that about 40 models of domestically assembled vehicles enjoyed the reduction in registration fees during the recent pandemic.

Some dealers have been utilising different promotional methods to entice new car buyers, photo Le Toan

The ministry also said that this policy was considered to have a negative impact on the implementation of international commitments. If it is necessary to reduce the registration fee for cars, it must be applied to both domestically manufactured and assembled cars and completely imported cars.

The manufacturers’ association proposal and the request of carmakers and imported dealers to cut registration fees has been rejected previously, leading to an increase in other sales promotions to attract customers in the context of low demand.

The Association of Vehicle Importers Vietnam had called for registration fee incentives for both domestically assembled and imported cars to ensure fairness as in 2020 and 2021. On both of those occasions, the market recovered and became active again, and auto sales increased sharply and maintained growth until the end of 2022.

“This decline did not come from the same cause as the pandemic period, but from many factors. Prominent reasons include bank interest rates not cooling, and customer sentiment looking forward to the new year production of cars,” said Nguyen Thanh Ha, chairman of SBLaw.

He added that for many reasons, car dealers and sales staff were going through a difficult time because there had been a decline in purchasing power in Vietnam. Thus, many manufacturers, as well as dealers, have implemented incentive programmes and discounts to stimulate demand. Some carmakers offered the registration discount out of their own revenues.

The Vios and Corolla Cross models continue to be supported by Toyota Vietnam with a 50 per cent reduction in the registration fee in April, with a maximum amount of VND44 million (about $1,900).

According to Toyota Motors Vietnam, the promotion for its best-selling cars is continuing in April with the focus on registration fee incentives for customers buying cars.

Honda has implemented a 100 per cent registration fee incentive initiative for the Honda CR-V and Honda City for many months. The effectiveness of this initiative is clear, as sales of both have improved in the last two reporting periods.

Meanwhile, Kia announced that in April it will also give full registration fee support for the K3 and Sportage series. Kia Vietnam also offers a special discount of 100 per cent of the registration fee and incentives up to VND100 million ($4,250), applicable depending on the model and version.

According to data from the General Department of Vietnam Customs, the total number of cars added to the Vietnamese market is estimated at 96,450 vehicles since the beginning of the year, including domestically produced and imported cars. As a result, dealers have prepared an abundant source of goods for Vietnamese customers, should the market pick up.